Special Report No 9/2010 ‘Is EU Structural Measures spending on the supply of water for domestic consumption used to best effect?’
Date: 2010-12-14
Institutions: European Court of Auditors
Subjects: costing, environmental protection, public health, use of water, water consumption, water management, water treatment

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Is EU strUctUral MEasUrEs 
spEndIng on thE sUpply of watEr
for doMEstIc consUMptIon UsEd 
to bEst EffEct?

En

 
 
 
 
 
special r eport no 9 

 2010

Is EU strUctUral 
MEasUrEs  spEndIng on 
thE  sUpply of watEr for 
doMEstIc consUMptIon 
UsEd to bEst  EffEct?

(pursuant to article 287(4), second subparagraph, tfEU)

EUropEan coUrt of a UdItors

EUropEan coUrt of a UdItors 
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special r eport no 9 

 2010

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luxembourg: publications office of the European Union, 2010

Isbn 978-92-9207-845-4 

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Printed in Luxembourg

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

contEnts

3

Paragraph

Glossary

I–VI 

ExEcutIVE  summary

1–10 

IntroductIon

1–4 

WatEr suPPly In thE Eu

5–10 

Eu  structural  mEasurEs co-fInancInG  of WatEr suPPly  InfrastructurE

11–15 

audIt scoPE  and objEctIVEs

16–70 

obsEr VatIons

16–35 

18–24 

 WErE thE most aPProPrIatE solutIons adoPtEd In ordEr to mEEt thE nEEds of thE  
arEas concErnEd?

 In alMost all casEs, forEcasts of nEEds dId not takE  Into accoUnt downward trEnds  In   
pEr capIta watEr consUMptIon, and 
wErE  consIdErEd

In soME  casEs, not all rEsoUrcEs alrEady avaIlablE   

25–27 

 thE  focUs  Is on bUIldIng  InfrastrUctUrEs to  EXploIt nE w watEr soUrcEs and at tEntIon 
rarEly paId to othEr sol UtIons, sUch as rEdUcIng watEr lossEs,  …

Is   

28 

… or UsIng  MorE  accEssIblE  rEsoUrcEs

29–35 

 lIMItEd val UE was addEd by thE  grant applIcatIons’ appraIsal by thE  coMMIssIon and thE  
MEMbEr  statEs’ ManagIng  aUthorItIEs  

36–48 

 haVE thE ProjEcts achIEVEd thEIr aIms of ImProVInG thE suPPly of WatEr for  
domEstIc consumPtIon?

39–40 

projEct objEctIvEs wErE  not always qU antIfIEd wIth rEgard to  EXpEctEd rEsUlt s

41–42 

projEcts achIE vEd  MEasUrablE  IMprovEMEnts  In thE  watEr sUpply to EU cItIzEns, bUt ..

.

43 

44 

... soME  projEcts wErE  not In opEratIon bEca UsE  of MIssIng lInks .. .

... and othEr projEcts contaInEd 

InhErEnt lIMItatIons

45–48 

rEportIng on achIE vEMEnts has bEEn of lIMItEd val UE

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49–70 

haVE thE rEsults bEEn achIEVEd at thE loWEst cost to thE Eu budGEt?

50–52 

EconoMy  Is affEctEd by dElays and cost ovErrUns

53–59 

sEvEral projEcts opEratE  wIth lIMItEd  EffIcIEnc y

60–63 

procEss for sE t tIng grant ratEs shows sIgnIfIcant wEaknEssEs  …

64–70 

… and doEs not takE  sUffIcIEnt accoUnt  of thE  abIlIty of thE  projEcts to gEnEratE  rE vEnUE

71–75 

conclusIons and rEcommEndatIons

72 

solutIons adoPtEd

73–74 

achIEVEmEnt of aIms

75 

cost to thE Eu budGEt

annEx I 
annEx II 
annEx III  – 

–  WatEr suPPly systEms
–  ProjEcts sElEctEd for thE audIt

 housEhold WatEr ExPEndIturE and dIsPosablE IncomEs In thE arEas sErVEd by 
thE ProjEcts

rEPly of  thE commIssIon

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

 
 
 
glossary

5

bulk water supply system:  all infrastructure enabling the provision of water in municipal/local 
tanks, including water abstraction, production, the long-distance transfer of raw water, treatment 
and transport up to the tanks. water is then provided to users through the distribution network.

cohesion fund (cf):  financial instrument designed to strengthen economic and social cohesion 
by financing environment and transport projects in Member states with a per capita gnp of less 
than 90 % of the EU average.  

cost-benefit analysis (cba): a technique for comparing all the costs and all the benefits of an in-
tervention to determine whether the benefits outweigh the costs, and if so, by what proportion.

cost recovery principle:  a principle requiring that the costs of a specific good or service are 
covered by the revenues.

In the field of water, Member states are required to adopt water pricing policies which take ac-
count of the recovery of all costs in order to provide incentives to use water resources efficiently 
(see article 9 of directive 2000/60/Ec of the European  parliament and of the council of 23 octo-
ber 2000 establishing a framework for community action in the field of water policy (oj  l 327, 
22.12.2000, p. 1).

distribution network:  all activities and infrastructures enabling the distribution of water to do-
mestic and other users from municipal or local tanks.

Effectiveness: Measurement of the relationship between objectives set and results achieved.

Efficiency: Measurement of the relationship between the resources employed and the results 
achieved; in the present report, the relationship between investment cost and, for example, the 
increase in water volumes supplied or the improvement in the quality of the water.

European regional  development  fund (Erdf):  financial instrument designed to promote eco-
nomic and social cohesion between the regions of the EU. Erdf interventions are mainly imple -
mented through operational programmes involving a large number of projects.

hm 3: hectocubic metre, equals 1 million m 3.

horizon year: a year in the future for which the estimated demand is used as a basis for planning 
water supply investment.

non-invoiced water:  difference between the volume of water abstracted and the invoiced con-
sumption, also known as unaccounted-for water. It includes leakages, illegal consumption, inac-
curacies in measurement and free use of water services. while leakages can only be estimated, 
non-invoiced water is a measurable parameter for which data are available in almost all the water 
supply systems. In this report, it is used as an indicator of the water system networks’ yield.

operational programme (oP):  a document approved by the commission which takes the form of 
a coherent set of priorities comprising multiannual measures. 

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glossary

Per capita consumption: at the level of an area, a municipality or a region, the volume of water, in 
litres per day and per person, necessary for ordinary domestic and industrial activities. hydrological 
planning documents establish values of per capita consumption on the basis of local residential 
characteristics and industrial development.

Programme period: the multiannual framework within which structural fund and cohesion fund 
expenditure is planned and implemented. 

social affordability: principle requiring that the population’s capacity to pay for water is taken into 
account when setting water prices intended to cover the costs of the services. It can be measured 
by the ratio of households’ water expenditure to their disposable income.

structural measures: In this report, interventions by the European  regional development fund 
and by the cohesion fund.

Water channel:  open or closed water ways in concrete or other materials. In this report the term 
is used only for water ways conveying water for mixed use, irrigation and domestic water supply.

Water main: pipes of different diameter and material used for the transport of water within a bulk 
water supply system.

Water reservoir: a rtificial lake created by building a dam in a river or stream.

Water tank: c ontainer in concrete or other material used to store water.

Water tariffs (charges): price of water charged by service providers to users. water tariffs vary for 
different users: households, industry and agriculture. water tariffs are usually charged together 
with waste water tariffs. 

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EXEcUtIvE 
sUMM ary

I.
w a t e r   i s   o n e   o f   t h e   m o s t   i m p o r t a n t 
re s o u rce s   fo r   s o c i a l   a n d   e co n o m i c   d e ve l-
o p m e n t .  wa t e r   s u p p l y   fo r   d o m e s t i c   c o n-
s u m p t i o n   i s   e s s e n t i a l   f o r   h u m a n   h e a l t h 
an d we llbeing.

II.
I nve s t m e nt s   i n   wate r   s u p p l y   a d d re s s   d i f-
f e r e n t   n e e d s ,   s u c h   a s :   i n c r e a s i n g   a v a i l -
a b i l i t y   o f   w a te r   i n   re s p o n s e   to   i n c re a s e d 
d e m a n d ;   e x p a n d i n g   g e o gra p h i c a l   cove r -
a g e ;   i m p r o v i n g   t h e   q u a l i t y   o f   t h e   w a t e r 
d i s t r i b u t e d ;   i m p r o v i n g   t h e   e f f i c i e n c y   o f 
w a t e r   s u p p l y   s y s t e m s   a n d   t h e   q u a l i t y   o f 
th e se r vice.

III.
t h e   c o u r t ’s   a u d i t   f o c u s e d   o n   t h e   i n f r a -
s t r u c t u r e s   e x c l u s i v e l y   d e d i c a t e d   t o 
d o m e s t i c   w a t e r   s u p p l y   c o - f i n a n c e d   b y 
t h e   c o h e s i o n   f u n d   a n d   t h e   Er d f  a n d 
c o m p l e t e d   d u r i n g   t h e   2 0 0 0 – 0 6   p r o -
gramme period in spain,  greece,  por tugal 
a n d   I t a l y,   w h i c h   a re   t h e   m a j o r   re c i p i e nt s 
o f   f u n d i n g   i n   t h i s   a r e a .   t h e   a u d i t   f i n d-
i n g s   a r e   b a s e d   o n   a   d i r e c t   r e v i e w   o f   2 9 
p ro j e c t s   —   1 1   a p p rove d   by   t h e   co m m i s-
s i o n   a n d   1 8   a p p r o v e d   b y   t h e   m a n a g i n g 
a u t h o r i t i e s   i n   t h e   M e m b e r   s t a t e s   —   a n d 
o n   a n   e x a m i n a t i o n   o f   t h e   c o m m i s s i o n 
a n d   M e m b e r   s t a t e s’  s y s t e m s   fo r   m a n a g-
in g an d monitor ing EU  funds.

IV.
t h e   m a i n   o b j e c t i v e   o f   t h e   a u d i t   w a s   t o 
a s s e s s   w h e t h e r   E U   s p e n d i n g   o n   w a t e r 
s u p p l y   i s   u s e d   to   b e s t   e f fe c t,   by   a d d re s s-
in g whe ther :

—  t h e   m o s t   a p p r o p r i a t e   s o l u t i o n s   w e r e 
a d o p t e d   t o   m e e t   t h e   n e e d s   o f   t h e  
areas con cer ne d;

—  the co -financed projects were success-
ful in im provin g  t he water  supply ;

—  t h e   o b j e c t i ve s   h ave   b e e n   a c h i e ve d   at 
th e lowest cost to th e EU budge t.

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EXEcUtIvE
sUMM ary

VI.
th e c our t re com me nds th at:

—  M e m b e r   s t a t e s   s h o u l d   i m p r o v e   t h e i r 
ex ante  analysis and forecast of future 
n e e d s   b y   t a k i n g   i n t o   a c c o u n t   r e c e n t 
a n d   a c c u r a t e   d a t a   a n d   i m p r o v e   t h e i r 
i n v e n t o r y   o f   a l l   a v a i l a b l e   w a t e r   r e -
sources; pay greater attention to alter-
n atives to supply  side s olution s  (s uc h 
a s   m e a s u r e s   t o w a r d s   r e d u c i n g   w a t e r 
losses) and to measures for the protec-
tion  of water qualit y ;

—  t h e   c o m m i s s i o n   s h o u l d   e n c o u r a g e 
M ember states to implement efficient 
water  resource  m anagement an d t ake 
its effec ts into account when planning 
c o - f i n a n c e d   w a t e r   s u p p l y   i n f r a s t r u c -
ture;

—  Member states should ensure, from the 
p l a n n i n g   s t a g e ,   t h a t   c o m p l e m e n t a r y 
in frastr uc t ure   necess ar y   for   th e  e nt r y 
i nto   o p e ra t i o n   o f   t h e   p ro j e c t s   w i l l   b e 
a v a i l a b l e   o n   t i m e ;   b e t t e r   m o n i t o r i n g 
tools for achievements and conditions 
sh ould  be put  in  place;

—  M e m b e r   s t a t e s   s h o u l d   p a y   m o r e   a t -
t e n t i o n ,   d u r i n g   t h e   p l a n n i n g   p h a s e , 
to fac tors that of ten create delays; re -
sults of better ex ante analyses should 
be taken into account in the design of 
n ew infrast ruc ture;

—  t h e   c o m m i s s i o n   a n d   t h e   M e m b e r 
s t a t e s   s h o u l d   i m p r o v e   t h e   q u a l i t y   o f 
th e cb as an d finan cing  g ap est imates 
and give due consideration to the abil-
i t y   o f   t h e   p r o j e c t s   t o   g e n e r a t e   r e v e -
n ues.

V.
t h e   c o u r t   f o u n d   t h a t ,   w h i l s t   s t r u c t u r a l 
m e a s u r e s   s p e n d i n g   h a s   c o n t r i b u t e d   t o 
improving the supply of water for domes-
t i c   u s e ,   b e t t e r   r e s u l t s   c o u l d   h a v e   b e e n 
achieved at  a lower co st.  I n  p ar t ic ula r :

—  forecasts of future water needs did not 
take into account downward trends in 
w a t e r   d e m a n d   n o r   a l l   r e s o u r c e s   a l-
r e a d y   a v a i l a b l e ;   m o r e o v e r,   fo c u s   w a s 
p l a c e d   o n   e x p l o i t i n g   n e w   s o u r c e s 
w i t h o u t   co n s i d e r i n g   a l te r n at i ve   s o l u-
t i o n s ,   s u c h   a s   r e d u c i n g   w a t e r   l o s s e s 
and using other nearby resources; lim-
ite d  val u e  was  added  by  th e  commis-
sion and the Member states’ managing 
autho r it ie s’ ap praisal ;

—  m e a s u ra b l e   i m p rove m e nt s   h ave   b e e n 
a c h i e ve d   i n   t e r m s   o f   i n c re a s e d   a v a i l-
a b l e   v o l u m e   o f   w a t e r,   e x t e n d e d   c o v -
e r a g e   o f   p u b l i c   n e t w o r k ,   b e t t e r   w a-
t e r   q u a l i t y,   h i g h e r   n e t wo r k   y i e l d   a n d 
s e r v i c e   c o n t i n u i t y ;   h o w e v e r,   s o m e 
projec ts were not operational because 
of  miss ing  co mp lem entar y  inf ra st r uc -
ture; monitor ing of achievements was 
o f   v a r i a b l e   q u a l i t y ;   w h e re   c o n d i t i o n s 
w e r e   i m p o s e d   i n   g r a n t   d e c i s i o n s ,  
a t t e n t i o n   w a s   n o t   a l w a y s   p a i d   t o 
w h e t h e r   t h o s e   c o n d i t i o n s   h a d   b e e n 
comp l ied wit h;

—  all  p ro je c t s  have  exp er ien ced   cost   i n-
c r e a s e s   a n d   d e l a y s ;   w h e n   m e a s u r e d  
b y   t h e   t w o   m a i n   e f f i c i e n c y   p a r a -
m e t e r s   ( c a p a c i t y   u t i l i s a t i o n   r a t e   a n d 
n o n - i nvo i ce d   w ate r ) ,   s e ve ra l   p ro j e c t s 
were found to operate with limited ef-
f i c i e n c y ;   s i gn i f i c a nt   we a k n e s s e s   we re 
o b s e r v e d   i n   t h e   p r o c e s s   f o r   s e t t i n g 
gr a n t s   a n d   i n s u f f i c i e n t   co n s i d e r a t i o n 
w a s   p a i d   b y   t h e   c o m m i s s i o n   a n d   t h e 
M e m b e r   st ate s’  m a n a gi n g   a u t h o r i t i e s 
to the abilit y of the projec ts to gener -
ate revenue s.

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IntrodUctIon

9

1. 

2. 

WatEr   s uP Ply  

In  t hE   Eu

 water is essential for human health and one of the most impor -
ta nt   n at ural  re sou rces  needed   for   so c ial  an d  e co nom ic  d eve l-
o p m e nt .  th e   d i s t r i b u t i o n   o f   s u f f i c i e n t   g o o d   q u a l i t y   wate r   fo r 
dome st ic co nsum p tion  is  an im por tant  pre req uis i te for  d eve l-
opm ent.

 In the EU, there are significant variations among Member states 
and   be t wee n  regio ns   w ithin  t he   sa me   state  in  th e  propor t ion 
of population covered by a public water supply system and the 
per capita consumption of water. there are also significant dif-
ferences in the efficienc y of water net works, the price of water 
and share of water expenditure in total household income (see 
Table   1).

ta b lE   1

m aIn   c h a r ac tErIs tIc s   o f  t hE
 WatEr   s uP Ply   f o r   d o mEs tIc 
u sE   In  t hE   Eu   —   aV Er a G E  Va luEs   at   m Em bEr   statE   lE V El 1

Minimum

Maximum

Population coverage
(% of total population)

Per capita consumption
(litres/day)

Non-invoiced water
(% of total water abstracted)

Water price (euro/m3)

Share of the expenditure for water 
supply in total household income (%)

70

70

7

0

0

100

270

55

2,1

2,5

1 

 the information has been collected from different sources: EUrEaU, Eurostat, oEcd, International 

benchmarking network for water and sanitation Utilities, and European commission (regional policy dg).

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3. 

 according to the treaties, the prudent and rational use of natu-
ral resources is one of the objec tives of the environmental pol-
ic y. the k ey  le gal  inst ru ment for wate r  is  th e water  fra me wo r k 
direc tive, which aims to ensure the protec tion of water and its 
sus t ainabl e  u se. the  direc tive   entered  into  force  i n  2 00 0 ,  an d 
h a d   to   b e   t r a n s p o s e d   by   d e ce m b e r   2 0 0 3 .   I t   e s t a b l i s h e d   c l a s-
sification systems for water qualit y and required a monitor ing 
n e t wo r k   by   2 0 0 6 ,   t h e   p u b l i c a t i o n   o f   r i ve r   b a s i n   m a n a g e m e n t 
plans in 2009 and, in principle, the attainment of environmen-
tal objec tives by 2015. I t also required Member states to adopt 
wate r- p r i c i n g   p o l i c i e s   p rov i d i n g   i n ce nt i ve s   to   e f f i c i e nt   wate r 
use,  w ith an adeq uate cont r ib ut io n to th is g oa l from  di ffe re nt 
categor ies of water user (cost recover y pr inciple). this obliga-
tion  is du e by  20 10 1.

4. 

 I n   a d d i t i o n ,   a   c o u n c i l   d i r e c t i v e   o n   d r i n k i n g   w a t e r   q u a l i t y   i s 
d e s i g n e d   t o   p r o t e c t   h u m a n   h e a l t h ,   i n   p a r t i c u l a r   b y   s e t t i n g 
maximu m va lu es for cer tain mic robi ologica l,  c h e mic a l an d or-
gano l ep tic  parameters 2.

1  directive 2000/60/Ec of the 
European parliament and of 

the council of 23 october 2000 

establishing a framework for 

community action in the field of 

water policy (oj l 327, 22.12.2000, 

p. 1). article 9 concerns the recovery 

of costs for water services. this 

framework directive was adopted 

when specific directives had already 

been adopted, for example the 

drinking water quality directive.

2  council directive 98/83/Ec of 
3 november 1998 on the quality 

of water intended for human 

consumption (oj l 330, 5.12.1998,  

p. 32). this directive replaces council 

directive 80/778/EEc.

Eu   st r u c t u r a l   m Ea s u rEs   co - fIn a n cInG   o f 
In f r a s t r u c t u rE
WatEr   s uP Ply  

5. 

 I nv e s t m e n t s   i n   w a t e r   s u p p l y   s y s t e m s   a r e   m a d e   a s   a   r e s u l t   o f 
one  or  mo re sp ec if ic n eeds. these  are th e need  to:

(a) 

increase availability of water, either because of population 
incre ase s or eco nomic  growth;

(b)   expand geographical coverage to sectors of the population 

w hich  were  exc l uded from publi c  wate r   se r v i ces ;

(c) 

improve the qualit y of the water distributed, either by de -
v e l o p i n g   n e w   w a t e r   r e s o u r c e s   o r   b y   t r e a t i n g   w a t e r   f r o m 
available sources, when for example existing sources have 
b een  co nt aminated by  industr y  o r  a gr ic ul ture ;

(d)  improve the efficienc y of water supply systems to address 

water  lo ss es o r th e obs ol esce nce  of  equ ipme nt;

(e) 

improve ser vice qualit y by reducing the number and dura-
t ion  of  rest r ic t io ns  an d inte r rupti ons.

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6. 

7. 

8. 

 the construc tion costs of water supply systems are eligible for 
assis t an ce,   u nde r  th e  co he s ion   polic y,  from  t he  European  r e -
gional  d eve l op ment  fun d (Er df) and  the   cohe sion fund (cf) . 
t h i s   s u p p o r t   m a y   v a r y   f r o m   2 5   %   u p   t o   8 5   %   o f   t h e   e l i g i b l e 
expe ndit ure 3.

 I n   t h e   2 0 0 0 – 0 6   p r o g r a m m e   p e r i o d ,   E U   f i n a n c i a l   s u p p o r t   f o r 
p ro j e c t s   d e d i c a te d   e xc l u s i ve l y   to   d o m e s t i c   w a te r   s u p p l y   a n d 
co -financed by these funds totalled 4,05 billion euro 4, with four 
M e m b e r   s t a t e s   a c c o u n t i n g   fo r   3 , 6 2   b i l l i o n   e u r o   o r   8 9 , 4  %   o f 
the total: spain, greece, por tugal and I taly. Expenditure in this 
fiel d is  l ikel y to  remain s ignifica nt  i n  th e 2 0 0 7 – 1 3  program me 
p e r i o d :   i t   i s   e s t i m ate d   t h at   t h e   1 5   M e m b e r   s t ate s   e l i gi b l e   fo r 
cf su p po r t s til l need to  inves t aroun d 2 5  bi llio n e uro in  wate r 
sup pl y 5.

 co -finan ce d  p roj ec ts   are  imp leme nte d  un de r   sh ared  m an ag e -
m e n t   b e t w e e n   t h e   c o m m i s s i o n   a n d   t h e   M e m b e r   s t a t e s ,   t h e 
commission bear ing the ultimate responsibilit y for the imple -
mentation of the budget 6. their roles depend on the fund pro -
viding the financial suppor t and on the level of the cost of the 
pro jec t.

(a)  for cf projec ts and E rdf major projec ts 7, the commission 
ex a m i n e s   t h e   q u a l i t y   o f   t h e   p ro j e c t s   to   b e   co - f i n a n ce d   i n 
t e r m s   o f   t h e i r   c o m p l i a n c e   w i t h   a p p l i c a b l e   E u r o p e a n   d i-
rec t ives  and th e p r ior ities of th e fund s, the ir potential to 
a c h i e ve   re s u l t s   w i t h   re g a rd   to   re gi o n a l   d e ve l o p m e nt   a n d 
t h e i r   n e e d   fo r   a n   E U   f i n a n c i a l   co n t r i b u t i o n .   th e   co m m i s-
sion’s decision to co -finance a project establishes the grant 
l e ve l   a n d   t h e   co n d i t i o n s   to   w h i c h   i t s   p ay m e nt   i s   s u b j e c t . 
I n   t h e   c a s e   o f   c f  p ro j e c t s,   a   f i n a l   re p o r t ,   i n c l u d i n g   a   d e -
scription of the work carried out and an initial assessment 
o f   t h e   a c h i e v e m e n t   o f   t h e   a n t i c i p a t e d   r e s u l t s ,   h a s   t o   b e 
p ro d u ce d   fo r   t h e   co m m i s s i o n 8.   I n   t h e   c a s e   o f   Er d f  m a j o r 
p roj ec t s, sp ec ific final  repor ts  are  n ot  re qui red.

(b)   for the other Erdf projec ts, the  commission’s role is limit-
ed to assessing and approving the operational programmes 
to which the projec ts belong and to whose general objec -
tives they should contribute; the Member states’ managing 
a u t h o r i t i e s   a re   re s p o n s i b l e   fo r   e v a l u a t i n g   g r a n t   a p p l i c a-
t ion s,  dec iding   o n  the  amount   of  th e  gra nt   an d   fol low in g 
u p t he  impl em entatio n o f th e  proj e c ts.

3  for more information, see 
article 29 of council regulation 

(Ec) no 1260/1999 of 21 june 1999 

laying down general provisions 

on the structural funds (oj l 161, 

26.6.1999, p. 1) and article 7 of 

council regulation (Ec) no 1164/94 

of 16 May 1994 establishing a 

cohesion fund (oj l 130, 25.5.1994, 

p. 1), as amended by regulation (Ec) 

no 1265/1999 (oj l 161, 26.6.1999, 

p. 62).

4  amounts estimated by the court. 
In addition, the EU has granted 

significant financial support to water 

supply projects which also include 

sanitation.

5  Strategic evaluation on 
environment and risk prevention 

under Structural and Cohesion Funds 

for the period 2007–13, synthesis 

report, 7.11.2006, p. 19. the report 

was commissioned by the regional 

policy dg.

6  article 274 of the treaty 
establishing the European 

community (ex article 205).

7 

In the 2000–06  programme 

period, ‘major projects’ were those 

‘whose total cost taken into account 

in determining the contribution of 

the funds exceeds 50 million euro’ 

(see article 25 of council regulation 

(Ec) no 1260/1999 of 21 june 1999). 

for more information on the subject, 

see the court’s special report  

no 1/2008 concerning the 

procedures for the preliminary 

examination and evaluation of 

major investment projects for the 

1994–99 and 2000–06  programme 

periods.

8  article f(4) of annex II of 
regulation (Ec) no 1164/94 as 

amended by regulation (Ec)  

no 1265/1999.

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9. 

10.  

 for each programme period, the commission issues guidelines 
for t he  imp l ementat io n of the fund s.  for th e 2 00 0 –06   per iod, 
t h e   g u i d e l i n e s   i s s u e d   i n   1 9 9 9   m a k e   i t   a   p r i o r i t y   t o   s u p p o r t 
c o m p l i a n c e   w i t h   t h e   e nv i ro n m e n t a l   s t a n d a rd s   e s t a b l i s h e d   i n 
t h e   r e l e v a n t   E U   d i r e c t i v e s .   t h e y   s p e c i f y   t h a t   p r o j e c t s   i n   t h e 
w a t e r   s e c t o r  ‘s h o u l d   b e   c o n s i s t e n t   w i t h   t h e   p r i n c i p l e s   o f   t h e 
p r o p o s e d   w a t e r   f r a m e w o r k   d i r e c t i v e’  a n d   t h a t  ‘ t h e r e   s h o u l d 
be  mo re  emp has is   on  increas ing   th e   e ff ic i e n c y   of  ex i st in g   in-
f r a s t r u c t u r e   w i t h   a   v i e w   t o   l i m i t i n g   l o s s e s’ 9.   I n   a d d i t i o n ,   t h e 
guide to the cohesion fund indicates that ‘all the investments 
i n   w ate r   s u p p l y   s h o u l d   b e   a cco m p a n i e d   by   a   co n c re te   a c t i o n 
p l a n   t o   l i m i t   w a t e r   l o s s e s   f ro m   t h e   d i s t r i b u t i o n   s y s t e m   t o   a n 
optima l p ercentage for the eff ic ie nc y  of  th e  s ys te m’ 10.

9  the structural funds and 
their coordination with the 

cohesion fund — guidelines for 

programmes in the period 2000–06. 

communication of the commission 

(oj c 267, 22.9.1999, p. 2). quoted  

in page 6.

10  guide to the cohesion fund 
2000–06 , annex a, Ec, version 1.0, 

february 2000, pp. 9–10.

 c o - f i n a n c e d   i n f r a s t r u c t u r e s   a r e   o f   v a r i o u s   t y p e s .   t h e  ‘ wa t e r 
s u p p l y   s ys te m s’  s c h e m e   i n   A n n e x   I   gi ve s   a   d e s c r i p t i o n   o f   t h e 
components of the water systems, from abstrac tion (bulk water 
supply systems) to distr ibution to end users (distr ibution net-
works), and Box 1 gives some examples of co-financed projects. 
th e   m o s t   co m m o n   e l e m e nt s   o f   t h e   wate r   s u p p l y   s ys te m s   a re : 
dams, desalination plants, water treatment plants, water mains, 
p u m p i n g   s t a t i o n s ,   r e s e r v o i r s ,   w a t e r   t a n k s ,   d i s t r i b u t i o n   n e t -
works, and remote control and detec tion systems for leaks and 
break dow ns.

b o x   1

E x a mPlEs   o f   Pr o jEc t s   co - fIn a n cEd   by  t hE

  Eu

one project aimed to extend the public water supply network to the population of rural districts which 
were using private and dispersed sources. the project consisted of 11 water tanks, 32,6 km of pipes for 
the connection of the new network to the bulk water supply system, 10 pumping stations and about 
87 km of pipes for the new distribution network. the cost of the project eligible for EU assistance was 
4,28 million euro, with 3,21 million euro of Erdf co-financing.

a series of projects was designed to create new water sources and to improve the water treatment in a 
bulk water supply system covering an area of 11 000 km2 and 2,5 million inhabitants. It consists of various 
co-financed projects: a desalination plant with a capacity of 65 000 m³ of water per day at an eligible cost 
of 55,10 million euro, with 46,86 million euro of cf co-financing; the renewal of a treatment plant with 
a capacity of 116 640 m³ of water per day at an eligible cost of 5,38 million euro, with 3,50 million euro 
of Erdf co-financing; and the construction of a water main of 27 km and three associated water tanks 
connecting the bulk water supply system with another desalination plant at an eligible cost of 19,71 mil-
lion euro, with 12,81 million euro of Erdf co-financing.

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so mE   Pr o jEc t s   co - fIn a n cEd   by  t hE

  Eu

Picture 1: Pumping station in Portugal

Picture 2: Desalination plant in Spain

Picture 3: Dam in Spain

Picture 4: Treatment plant in Greece

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special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

aUdIt scopE and 
objEctIvEs

14

11.  

 the main objective of the audit was to assess whether EU struc -
t u ra l   m e a s u re s   s p e n d i n g   o n   t h e   s u p p l y   o f   wate r   fo r   d o m e s t i c 
consu mp t ion is u sed to  b est  e ffe c t.

12.  

the  c o ur t  addre sse d the fo l l owin g  su b - qu es ti on s:

(a )  we re   t h e   m o s t   a p p ro p r i ate   s o l u t i o n s   a d o p te d   i n   o rd e r   to 

me et  th e need s of  t he areas con cer n ed ?

(b)   ha v e   t h e   p r o j e c t s   a c h i e v e d   t h e i r   a i m s   o f   i m p r o v i n g   t h e 

su p p ly  of water  for dom es tic   con sum pt ion ?

(c)  ha v e   t h e   o b j e c t i v e s   b e e n   a c h i e v e d   a t   t h e   l o w e s t   c o s t   t o 

t he E U b udg et ?

13.  

14.  

 t h e   a u d i t   w a s   c a r r i e d   o u t   a t   t h e   co m m i s s i o n   a n d   i n   t h e   fo u r 
M emb er   st ate s  w hich  accou nt  for  most  o f  th e   expen dit ure   on 
infrastruc ture exclusively dedicated to water supply for domes-
tic  use : sp ain, greece,  p o r t u g al and I taly.

 I t   w a s   c o n d u c t e d   f r o m   fe b r u a r y   2 0 0 9   t o   M a r c h   2 0 1 0 ,   o n   t h e 
b a s i s   o f   a   s a m p l e   o f   2 9   p ro j e c t s   f i n a n c e d   u n d e r   t h e   2 0 0 0 – 0 6 
p r o g r a m m e   p e r i o d   a n d   p hy s i c a l l y   c o m p l e t e d .   t h r e e   o f   t h e m 
we re   a p p rove d   by   t h e   co m m i s s i o n   b e fo re   2 0 0 0 ,   b u t   a l l   t h re e 
we re   s u b s t a n t i a l l y   m o d i f i e d   by   co m m i s s i o n   d e c i s i o n s   d u r i n g 
th e  20 00–06  p er iod.  the  p rojec t s  were  selec ted   in  propor ti on 
t o   t h e   s i z e   o f   t h e   t o t a l   f i n a n c i a l   s u p p o r t   p r o v i d e d   t o   e a c h  
o f   t h e   fo u r   M e m b e r   s t a t e s .   n i n e   w e r e   c o - f i n a n c e d   b y   t h e   c f 
a n d   2 0   b y   t h e   Er d f ,   t w o   o f   w h i c h   w e r e   m a j o r   p r o j e c t s 7  ( s e e 
A nnex II).

15.  

 projec t files were reviewed at all levels and meetings were held 
with representatives of var ious local author ities and public or 
mixed   comp anies  resp o ns ib le  for   th e  de si gn ,  i mple me nt at ion 
and management of the infrastruc tures related to the selec ted 
p r o j e c t s .   t h e   c o u r t   w a s   a s s i s t e d   b y   e x p e r t s   i n   w a t e r   s u p p l y 
engine er ing.

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obsErvatIons

15

WErE  t hE   m o s t   aP Pr oPrIatE   s o lu tIo n s 
a d oPtEd  
t hE   a rEa s   co n cEr nEd ?

In   o r dEr  to   mE E t  t hE   nE Ed s   o f 

16.  

 the  co mmit ment o f financial  resource s to t he  build in g  of  n ew 
infras truc t u re,  w hic h  is   of ten  expe c ted   to  be   us ed   for   se ve ral 
decade s, sh oul d b e p receded  by an  an a lys i s aim in g  at  f in di n g 
t h e   b e s t   s o l u t i o n   t o   l o c a l   w a t e r   s u p p l y   n e e d s .  t h e   m a i n   e l e -
ments of such an analysis are the demand forecast, calculated 
m a i n l y   f ro m   t h e   s i ze   o f   t h e   p o p u l a t i o n   a n d   t h e   e x p e c t e d   p e r 
capita consumption, and the availability and quality of existing 
w a t e r   re s o u rc e s.   s o m e   o f   t h e s e   e l e m e n t s,   s u c h   a s   p e r   c a p i t a 
consu mp t io n an d t he qu al it y of  exi st ing  water  res ource s,  m ay 
be inf l uen ce d by d emand side m eas ure s  and a c ti on s  for  wate r 
res o urce p rotec tio n resp ec tively.

17.  

 the  c o ur t  examine d whether :

(a )  the estimates of water needs underpinning co -financed in-
frastruc ture projec ts were based on well-founded assump -
tions about the evolution of demand and water availability 
in t he  area co ncer n ed;

(b)  var io u s p otential  so lut ion s,  in clu din g  ac ti on  to  af fec t  de -
m a n d   o r   t o   m a i n t a i n   o r   i m p ro ve   t h e   q u a l i t y   o f   t h e   w a t e r 
resources currently used, had been adequately analysed in 
o rder  to se le c t  the b es t one ;

(c)  t h e   a u t h o r i t i e s   i n   c h a r g e   o f   a s s e s s i n g   a p p l i c a t i o n s   a n d 
a p p r o v i n g   g r a n t s   h a v e   a d d e d   v a l u e   t o   t h e   p r o j e c t s   p r o -
p o sed.

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18.  

19.  

20.  

21.  

I n   a l m o s t   a l l   c a sEs ,  f o rEc a s t s   o f   nE Ed s   dId 
n ot  ta kE   In to   acco u n t   d o WnW a r d  t rEn d s   In 
P Er   c aP Ita   WatEr   co n s u mPtIo n ,  a n d  
In   s o mE  
c a sEs ,  n ot   a l l   rEs o u r cEs   a l rEa dy   a VaIl a b lE  
W ErE   co n sIdErEd

 the decision to build new infrastruc ture for water supply was, 
in all but three projec ts, based on estimates of future demand 
a n d   o f   t h e   n e e d   f o r   s u p p l e m e n t a r y   w a t e r   r e s o u r c e s .   I n   t h e 
three  exce pt io ns,  no  su ch est imate s we re  n eces sa r y  as  t h e in-
vest m ent   co ns is ted  merely  in   ad din g   or   re plac i ng   an   e lem ent 
in a n exis ting  sys tem.

 I n 2 1 cas es, de mand was estimate d on  th e  bas is  of th eore ti c al 
p e r   c a p i t a   c o n s u m p t i o n   re c o m m e n d e d   by   hyd ro l o g i c a l   p l a n -
n i n g   d o c u m e n t s,   g i ve n   t h e   l a c k   o f   d a t a   o n   c o n s u m p t i o n   a n d 
losses from the net works in the past. the demand estimated in 
this way was sometimes adjusted upwards using various factors 
t h at   a re   d i f f i c u l t   to   e va l u ate,   s u c h   a s   t h e   e f fe c t   o f   te m p o ra r y 
popu l at ions 11 and  indus t r ial is ation rate.

 In the other five cases, water demand forecasts were estimated 
o n   t h e   b a s i s   o f   d at a   a b o u t   re a l   p a s t   co n s u m p t i o n ,   b u t   a p p l y -
i n g   d i f fe re nt   m e t h o d s.   I n   t h re e   o f   t h e s e   c a s e s,   t h e   p e r   c a p i t a 
consump tion used to justify the n eed for  the proj ec t is higher 
t h a n   t h e   o n e   r e c o m m e n d e d   b y   h y d r o l o g i c a l   p l a n n i n g   d o c u-
ment s.

 M o r e o v e r,   i n   a l m o s t   a l l   t h e   p r o j e c t s ,   t h e   d e m a n d   e s t i m a t e s 
do  not   refl ec t   t he d ow nward tren d  in  pe r  capi ta cons um pti on 
and, sometimes, in water losses that has taken place since the 
end of the 1990s or early 2000s in most of the areas concerned 
by the pro je c ts 12.  this  tre nd is a result of im provem e nt s i n  t he 
net wor ks 13, the installation of domestic meters and awareness 
c a m p a i g n s   p r o m o t e d   b y   w a t e r   a u t h o r i t i e s   a n d   o p e r a t o r s.   a s 
the implementation of such demand side measures is becoming 
more wide sp re ad,  an  increasing  tren d of  per  c a pita  cons ump -
tion  is u nl ikel y 14.

11  temporary (transient) population 
refers to tourists, commuting and 

seasonal workers, i.e. all non-

resident persons.

12  for example, in four big cities, 
the downward trend in per capita 

consumption is so sharp that, 

despite population increase, the 

overall water consumption has 

decreased between 1 % and 29 % 

since the end of the 1990s. In a 

densely populated coastal area, 

the same trend has been observed 

since the early 2000s. Eight projects 

examined are located in these areas.

13  Improvements in the networks 
result in reduced losses. losses are 

considered as being part of the 

demand as they need to be covered 

by the total water production.

14  see also communication from 
the commission ‘addressing the 

challenge of water scarcity and 

droughts in the European Union’, 

coM(2007) 414 final and final report 

from the commission to the council 

and the European parliament on the 

‘follow-up to the communication on 

water scarcity and droughts in the 

European Union’, coM(2008) 875.

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22.  

 as a resu lt, a com p ar is on b et we e n fo re c ast s o f f uture  de m and 
and ac tual consumption ver y of ten shows that (see Table 2 for 
some  examp le s):

15  the most recent data available at 
the time of the audit.

(a)  a c t u a l   p e r   c a p i t a   c o n s u m p t i o n   i n   2 0 0 8 1 5  i s   s i g n i f i c a n t l y 
lower than the estimate for the horizon year, and in several 
ca ses, it  is even l ess  t han  half of   th is  e st im ate;

(b)   a c t u a l   o v e r a l l   c o n s u m p t i o n   i n   2 0 0 8   i s   m u c h   l o w e r   t h a n 

es tim ate d.

ta b l E   2

Wat E r   co n s u m P t I o n   E s t I m at E s   a n d   ac t ua l  Va lu E s   I n   2008 
f o r   s o m E   P r o j E c t s   E x a m I n E d

Project

Per capita consumption in
l/day

Overall consumption in hm3/year

Country

Horizon year

Estimated 
ex-ante for the 
horizon year 1

Actual 
in 2008 1

Estimated ex-ante

Actual

For the horizon 
year

For 20082

In 2008

ES

GR

IT

PT

PT

ES

2027

2020

2040

2030

2038

2030 

530

375–609

432

154–300

150

350

286

197

360

34–66

74

201–291

26

219

178

25

0,6

8,5

24

180

149

15

0,4

no data

14

90

90

6

0,1

4,3

1  per capita consumption includes peaks, losses and industrial coeffi  cient.
2 

 the overall consumption estimates for 2008 were indicated in the project studies or calculated by the court on the basis of 

population and per capita consumption trends shown in these studies.

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23.  

 r es ou rce s  al ready   avail abl e  were   n ot   f ul ly   t ake n   into  account 
i n   t h e   d e s i g n   o f   n e w   i n f r a s t r u c t u r e   i n   s i x   c a s e s   ( s e e   B o x   2 ) . 
I n   p a r t i c u l a r,   w h e r e   w a t e r   w a s   o f   p o o r   q u a l i t y,   f o r   e x a m p l e 
b e c a u s e   o f   h i g h   n i t r a t e s   o r   s u l p h a t e s   c o n t e n t ,   i t   w a s   n o t   e x-
amin ed whet her th is water could h ave  be en  mi xed  wit h wate r 
of  g o od   q ual it y  in  ord er  to  me et  th e  re g ulato r y   s ta nda rds   for 
d r i n k i n g   wate r,   i n s te a d   o f   b e i n g   f u l l y   re p l a ce d   by   wate r   f ro m 
ano t her so urce 16.

16  directive 98/83/Ec sets 
parametric values for such 

substances as sulphate and nitrate 

salts in water intended for human 

consumption. when the salt 

concentration exceeds these values, 

it is common practice to dilute the 

water with other (available) water 

from low salinity sources.

24.  

 a better estimation of future demand and water deficits could 
have  made   it   p o ssib l e  to   con side r   alte r n ati ve  s oluti ons   wh i ch 
were  n ot   tak en  into  accou nt  an d  bui ld  sm alle r   capa ci t y   i n fra-
struc t ure.

b o x   2

E x a mPlEs   o f   Pr o jEc t s   WhErE   aVaIl a b lE   rEs o u r cEs   W ErE  
I Gn o rEd   In  t hE   Pl a n nInG   Ph a sE

In spain, the Erdf co-financed a project to improve the quality of water supplied to various neighbouring 
municipalities, as current water supply did not comply with regulatory parameters. the estimates of water 
volume to be provided by the new infrastructures were based upon the estimate of total future demand 
for the area. nevertheless, some of the municipalities had water of excellent quality and experienced 
no shortages. furthermore, the project could have been based on the estimate of the volume of good 
quality water required to achieve the appropriate mix with the low quality water already available. four 
years after commissioning, the rate of use of the new capacity is around 16 %.

In another case co-financed by the cf in spain, a dam was built to cover a future demand estimated at 
13,9 hm3/year, without considering the resources that were already available (8 hm 3/year). at the time of 
the audit, this dam was not necessary to cover the current demand of the area (8 hm3/year) as available 
resources were already sufficient. the co-financed infrastructure will be used as a reserve or for other 
areas and not as initially planned.

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thE   f o c u s   Is   o n   b uIl dInG   In f r a s t r u c t u rEs  to 
ExPloIt   nE W  WatEr   s o u r cEs   a n d   at tEn tIo n 
Is   r a rEly   PaId  to   ot hEr   s o lu tIo n s ,  s u c h   a s 
rEd u cInG  WatEr   lo s sEs , ...

 I n   a l l   t h e   c a s e s   e x a m i n e d   by   t h e   co u r t ,   t h e   s o l u t i o n   s e l e c te d 
to tack le the estimated water deficit was to exploit new water 
sou rces an d trans por t t he water  to  th e  are as  con ce r ne d 17.

 where the level of non-invoiced water was high, the possibility 
of  imp roving   the   dis tr ib ut ion  ne t wor k s  was   rare ly   con si de red 
as a means  o f redu cin g f utu re  water  n eed s,  t he re by exc ludi n g 
potential  small er  cap ac it y so l ut io ns  ( se e  B ox  3) .

 I n t wo  cas es,  however,  mu nic ipali ti es  h ave t aken  ac ti on  to re -
duce demand.  I n t hese cas es,  t h e res ult s have  be en  so s ign i fi-
cant  t hat  t he co -fin anced infras truc t ure  has become unn ece s-
sar y in  the  s ho r t  ter m o r is  overs i zed  ( se e  B ox  4) .

25.  

26.  

27.  

17  Moreover, it should be stressed 
that the transport of water over a 

distance higher than 100 km is very 

costly. besides the high investment 

cost, the operating cost represents 

up to 50 % of the total cost of  

the water supply (a. gee, Ec 

Competition  Policy Newsletter no 2, 

summer 2004).

b o x   3

P otEn tIa l  
WatEr   nE Ed s

ImP ac t   o f   rEd u cInG   n o n -InV oIcEd   WatEr   o n 

the increase in the volume of water made available to an Italian city, which was one of the objectives of a 
co-financed project, could have been achieved by reducing non-invoiced water in the city water network 
from 44,5 % to 11,5 %, which is an achievable rate already reached in some sectors of that city.

for a bulk water supply infrastructure in greece, the design of the project was based on future demand 
estimates, including a high water loss rate (30 %). despite some investment to improve the distribution 
network, also co-financed with EU funds, the loss rate remains around 30 %. Effective action to reduce 
water losses would have resulted in the need for a smaller new water supply infrastructure.

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…  o r   u sInG   m o rE   accEs sIb lE   rEs o u r cEs

28.  

 there can be competing demands on water resources between, 
for exam pl e, t he needs of agr iculture  a nd  dom es ti c con sum p -
tion. the possibilit y of using water resources reser ved for agri-
cultural use for human consumption has not been explored for 
the projects examined (see Box 5). nonetheless, good prac tices 
h a v e   b e e n   n o t e d   i n   s o m e   sp a n i s h   r e g i o n s ,   w h e r e   a   f l e x i b l e 
e xc h a n g e   s ys te m   re g a rd i n g   wate r   u s a g e   r i g ht s   i s   i n   p l a ce,   s o 
that water intended for ir r igation can be used to supply water 
for d om est ic con su mp tio n w h en  n eed ed.

b o x   4

E x a mPlEs   o f   bEnEfIcIa r y   m u nIcI P
ac tIo n  to   rEd u cE  WatEr   lo s sEs

a lItI Es   h a V InG  ta kEn 

the cf co-financed the construction of a dam so as to provide 34 hm 3/year of water to a spanish city 
and its surrounding area. this dam was justified on the basis of an estimated demand of 158 hm3/year 
by 2012. at the same time the city drew up an action plan including the installation of individual meters 
in apartments and the improvement of the transport and distribution network. this was also a condition 
imposed by the commission when it approved the grant in 2000. the action plan achieved better results 
than those required by the commission: non-invoiced water is currently around 20 % compared to 36 % 
beforehand. furthemore, despite a significant increase in population, overall demand has decreased 
from 142 hm3 in 1997–98, when the project was approved, to about 120 hm3 in 2008.

for another spanish city, the  cf co-financed a bulk water supply system.  the project estimated the 
city’s future demand at 113 hm 3. the commission, in its co-financing decision of 2001, imposed the 
implementation of a plan to reduce leakage, which resulted in a reduction in non-invoiced water from 
50 % to 30 %. though the population has increased, overall demand has decreased from 81 hm3 in 1996 
to 61 hm3 in 2008.

b o x   5

thE   u sE   o f   nEa r by   WatEr   rEs o u r cEs

In the areas corresponding to two co-financed projects in spain, several municipalities were distributing 
water with a nitrate content significantly higher than the maximum set by the drinking water quality 
directive, due to contamination from agriculture. the possibility of using nearby good quality surface 
water for domestic consumption, instead of poor quality water, was not considered by the project pro-
moter because the usage rights of this good quality water had been granted to farmers. for each project, 
underground water wells and transport pipes of about 50 km in length were built. however, for one 
of these projects, the authorities in charge of water management had not yet granted an abstraction 
permit and requested the local authorities to look for a solution to make it possible to use surface water 
reserved for farmers. this would, however, require additional infrastructure to be constructed.

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18  see in particular  
paragraph 41 of special report  

no 3/2009 concerning the 

effectiveness of structural measures 

spending on waste water treatment 

for the 1994–99 and 2000–06 

programme periods.

19  council directive 91/676/Ecc 
of 12 december 1991 concerning 

the protection of waters against 

pollution caused by nitrates and 

council directive 91/271/EEc of  

21 May 1991 concerning urban 

waste water treatment.

29.  

30.  

31.  

32.  

33.  

l ImItEd   Va luE  Wa s   a d dEd   by  t hE   Gr a n t 
aP PlIc atIo n s’  aP Pr aIs a l   by  t hE
a n d  t hE   m Em bEr   statEs’  m a n aG InG   au t h o rItI Es

  co m mIs sIo n 

 the audit sample includes nine cf projects and two Erdf major 
p ro j e c t s   w h i c h   we re   ex a m i n e d   a n d   a p p rove d   by   t h e   co m m i s -
sion.  the  o t her  18  p ro jec t s   were  co - fin anced  by  th e   Erd f  and 
w e r e   a p p r o v e d   b y   t h e   M e m b e r   s t a t e s’  m a n a g i n g   a u t h o r i t i e s 
(see p a ragrap h 8).

 as already found in other cour t repor ts 18, the absence of guid-
ance and check lists for assessing the grant applications in the 
200 0–06  pro gramme  p er iod   m eant   t hat   i t  was  n ot  pos si ble  to 
ide nt ify t he c hec ks  car r ied out by  t he  c ommiss ion .

 In no cases did the commission question the forecasts of future 
demand or the solutions chosen; nor did it ask for infor mation 
abo ut  o ther p otent ial  s ol u tio ns,   suc h  as  acce s sin g  or   treat in g 
w a te r   av a i l a b l e   n e a r by   r a t h e r   t h a n   e x t r a c t i n g   i t   f ro m   f u r t h e r 
away.

 fo l l ow i n g   i t s   re v i e w,   t h e   co m m i s s i o n   i m p o s e d   co n d i t i o n s   o n 
fo u r   p ro j e c t s,   re l at i n g   to   t h e   re d u c t i o n   o f   wate r   l o s s e s.   how -
e ve r,   i n   o n e   c a s e   t h e   co m m i s s i o n   d i d   n o t   q u a nt i f y   t h e   o b j e c-
t i v e s   c o n c e r n e d ;   i n   a n o t h e r   c a s e ,   t h e   d e a d l i n e s   f o r   m e e t i n g 
th em were set  fo r af ter th e com ple tion  date of  t he  proje c t,  by 
wh ich  t im e t he b al ance of  t he  grant  would have  been  pai d.  I n 
no case was the effec t of the required reduc tion in water losses 
ta ken  into  acco unt in the cal culati on  of  wate r  n eed s.

 I n   t w o   o f   t h e s e   p r o j e c t s ,   t h e   g r a n t   d e c i s i o n   a l s o   i n c l u d e d   a 
provision to the effec t that the author ities had to monitor the 
appl ic at io n  o f  th e  d irec t ives  on  t h e  prote c t ion   of   sur f ace  an d 
u n d e rgro u n d   wate r s 1 9  a n d   i n fo r m   t h e   c f  M o n i to r i n g   co m m i t-
tee.  the se  p rovisio ns  had  th e  mer it  of   c re at in g   a  s peci fi c   li nk 
b e t w e e n   t h e   p a y m e n t   o f   t h e   g r a n t   a n d   t h e   r e q u i r e d   a c t i o n . 
ho w e v e r,   c o n t a m i n a t i o n   b y   n i t r a t e s   o r   w a s t e   w a t e r   a l s o   a f-
fe c te d   o t h e r   p ro j e c t s,   w h i c h   we re   d e s i gn e d   p a r t l y   to   re p l a ce 
t h e   c o n t a m i n a t e d   s o u r c e s   a n d   w h i c h   w e r e   a p p r o v e d   b y   t h e 
co m m i s s i o n   w i t h o u t   a ny   co n d i t i o n .   fu r t h e r   m e a s u re s   a i m i n g 
at speeding up environmental recover y were never imposed as 
condit ion s for  the EU grant.

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34.  

 I n   t h e   M e m b e r   s t a t e s ,   t h e   c o u r t ’s   r e v i e w   f o u n d   t h a t ,   i n   n o 
case did managing authorities suggest or make changes to the 
proj ec t  p ro p os al s.  co ndit ion s abo ut water losse s and s avi n gs, 
a s   we l l   a s   m e a s u re s   to   p ro te c t   t h e   q u a l i t y   o f   raw   wate r,   we re 
never im po se d.

35.  

 for the 2007–13 period, the way water supply projects are man-
age d ha s chang ed:

(a )  at the commission, only projec ts whose total cost exceeds 
50 million euro are examined. new assessment procedures 
have   b een  d esigned:   p roj ec t   appl i c ati on s  h ave  to  inc lu de 
the results of feasibility studies, including the examination 
o f   a l t e r n a t i v e s ;   a   c h e c k l i s t   h a s   b e e n   d e v e l o p e d   i n   o r d e r 
to  as se ss pro jec t  ap p l ic ation s,  in  par ti c ula r  re gard ing  t he 
e f f i c i e n c y   o f   wate r   re s o u rce   m a n a g e m e nt   ( e. g.   a c t i o n s   to 
r e d u c e   c o n s u m p t i o n   o r   r e u s e   w a s t e   w a t e r )   i n   t h e   a r e a s 
concerned by the projec ts. however, the use of assessment 
c r i t e r i a   c o u l d   i m p r o v e   t h e   e f f e c t i v e n e s s   o f   t h e s e   p r o c e -
du res  and the  consistenc y  o f  th ei r  re su lts ;

(b)   as regards the Member states visited, some positive initia-
tives have been taken: in three regions, one of the cr iter ia 
for allocating Erdf assistance is that the proposed projec t 
s h o u l d   b e   p a r t   o f   a   s t rate gi c   p l a n   fo r   t h e   a re a   co n ce r n e d 
a n d   t h a t   i t   s h o u l d   b e   c o m p l e m e n t a r y   t o   b u l k   w a t e r   s y s-
tems already built or planned. I n I taly, the new procedures 
provide for increasing the budgets of regional operational 
programmes achieving better results in terms of water loss 
red uc t ion.

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36.  

37.  

ha V E  t hE   Pr o jEc t s   ac hI E V Ed  t hE Ir   aIm s 
o f   ImPr o V InG  t hE   s uP Ply   o f   WatEr   f o r 
d o mEs tIc   co n s u mPtIo n ?

 t h e r e   c a n   b e   m a n y   r e a s o n s   f o r   b u i l d i n g   n e w   i n f r a s t r u c t u r e 
( s e e   p a r a g r a p h   5 )   a n d   p r o j e c t   o b j e c t i v e s   c a n   t h e r e f o r e   v a r y 
s i g n i f i c a n t l y.  to   e n a b l e   e f fe c t i ve   m o n i t o r i n g   a n d   e v a l u a t i o n , 
p ro j e c t   o b j e c t i ve s   s h o u l d   b e   d e f i n e d   a n d   q u a n t i f i e d   i n   gr a n t 
app l icat io ns  and  f inancing  d e ci sio ns,  in   te r ms   of   ou tpu t s  an d 
res ul t s.

 a range of indicators can be used to assess the ex tent to which 
objec tives have been achieved. while output indicators should 
b e   d e f i n e d   i n   t e r m s   o f   p h y s i c a l   a c h i e v e m e n t s ,   s u c h   a s   k i l o -
m e t r e s   o f   p i p e l i n e ,   n u m b e r   o f   t a n k s ,   e t c . ,   r e s u l t   i n d i c a t o r s 
s h o u l d   b e   d e f i n e d   i n   o rd e r   to   re f l e c t   t h e   e x te nt   to   w h i c h   t h e 
spec ific  ne eds  addressed  by th e  proj e c t have  bee n  m et :

(a)  av a i l a b i l i t y :   t h e   a d d i t i o n a l   vo l u m e   o f   w a t e r   e n t e r i n g   t h e 

su p p ly  system du e to  the n ew in f rast r uc t ure;

(b)   cove r a g e :   t h e   i n c re a s e   i n   t h e   n u m b e r   o f   p e o p l e   a n d   p e r-
cent ag e o f the  pop u l atio n supp lie d by  t he  wate r  d i st r ibu-
t ion  net wor k ;

(c)  w a t e r   q u a l i t y :   t h e   p e r c e n t a g e   o f   t e s t s   w h e r e   w a t e r   w a s 
assessed as non- compliant with EU, national or local stand-
ards and the improvement of the values for the parameters 
w hich  were  p revio us l y n on - com pliant;

(d)  e f f i c i e n c y   o f   t h e   s y s t e m s :   t h e   r e d u c t i o n   o f   n o n - i nvo i c e d 

water ;

(e)  ser vice qualit y : the reduc tion in the number and duration 

o f res t r ic t ions  and inter rupt ion s  to  t he   se r v i ce.

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38.  

 the  c o ur t  examine d whether :

(a )  o b jec t ives had b een d efined an d q uanti fi ed ;

(b)  o b jec t ives had b een ac hieved;

(c)  achievements had been monitored by the authorities which 

ap p roved the  grants.

39.  

40.  

41.  

42.  

P r o jEc t   o b jEc tI V Es   W ErE   n ot   a lWays 
q ua n tIfI Ed   W It h   rE Ga r d  to   ExP Ec tEd   rEs u lt s

 grant applications and decisions included measurable outputs 
t o   b e   a c h i e v e d .   fo r   s o m e   p r o j e c t s   e x a m i n e d ,   d u e   t o   t h e   a b -
sen ce o f s pec if ic  ap p l ic atio ns an d de c is i on s,  o ut put s we re se t 
ou t and  quant ifi ed in p rojec t  st ud i es.

 M o s t   o f   t h e   p r o j e c t s   e x a m i n e d   i n c l u d e d   o v e r a l l   m e a s u r a b l e 
o b j e c t i v e s   e s t a b l i s h e d   i n   t e r m s   o f   p o p u l a t i o n   t o   b e   c o v e r e d 
and volume of water to be supplied. however, not all expec ted 
re s u l t s   ( s u c h   a s   re d u c i n g   t h e   q u a n t i t y   o f   n o n - i nvo i ce d   w a te r 
and improving ser vice continuity and water quality) were quan-
tified.

P r o jEc t s   ac hI E V Ed   mEa s u r a b lE   ImPr o V EmEn t s 
In  t hE  WatEr   s uP Ply  to   Eu   cItIzEn s ,  b u t  ...

 all projects audited, despite delays and cost overruns (see para-
graphs 51 to 52), were physically implemented as planned, with 
minor variations in, for example, the length of the pipelines or 
the  cap acit y o r lo c atio n of the ta nk s, agre e d dur in g  cons t r uc -
tion .

 I n   t e r m s   o f   r e s u l t s ,   p r o j e c t s   h a v e   c o n t r i b u t e d   t o   i m p r o v i n g 
the  su pp l y o f water  for domest ic us e,  e it h er  by  in cre asi n g t he 
a v a i l a b l e   v o l u m e   o f   w a t e r,   e x t e n d i n g   t h e   p u b l i c   n e t w o r k   t o 
areas which were previously not connec ted or improving water 
qual it y,  ne t wo r k effic ienc y  or  se r v ice  cont in uit y  ( s ee  B ox  6) .

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Picture 5: Water feeding a new water main increasing  
availability in an Italian region

Picture 6: New treatment plant improving water quality  
in a big Greek city

b o x   6

E x a mPlEs   o f   Po sItI V E   ac hI E V EmEn t s

In order to cover the water deficit of a spanish area, the cf co-financed a desalination plant with a 
production capacity of 22 hm 3 of drinking water per year. since 2006, the plant has been operating at 
around 90 % of its capacity, alleviating the water deficit of the three largest municipalities supplied. 
compared to the previous situation, significant improvement has also been achieved in the quality of the 
water distributed to the population in terms of some of the standards of the EU directive (conductivity 
and content in trihalomethanes and sulphates).

In order to satisfy the needs of an urban area in Italy suffering from water scarcity, the Erdf co-financed a 
water main to convey water from a new dam to several municipalities. for the 2004–08 period, the annual 
volume made available to the area was 14,5 hm3. this new water main has provided the municipalities 
with additional water resources and has released other sources which were under pressure.

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20  a similar case had been observed 
in a statement of assurance exercise 

(see annual report 2008,  

paragraph 6.19). It concerns a 

water main which was physically 

completed in 2004 but was not in 

use at the beginning of 2009, due to 

lack of water in the reservoir feeding 

the water main.

...  s o mE   Pr o jEc t s   W ErE   n ot   In   oP Er atIo n 
bEc au sE   o f   mIs sInG   lIn k s  ...

43.  

 five projects, although physically completed between 2005 and 
20 08,  ha d not  del ivered any  res ul ts  by  th e  ti me  of  th e audit 20. 
two other projec ts completed in the same period have become 
par tially operational, but with limited results. the main reason 
for this was the lack of complementar y infrastruc ture, delayed 
eit her in  it s co ns t ru c tio n or entr y  into  s er vice  ( se e B ox  7) .

...  a n d   ot hEr   Pr o jEc t s   co n taInEd  
lImItatIo n s

In hErEn t 

44.  

 In some cases, the achievement of results is affected by projects’ 
i n h e re nt   l i m i t at i o n s :   fo r   i n s t a n ce,   i n   o n e   p ro j e c t   d e s i gn e d   to 
imp rove  t he   qual it y  of   the  water   di st r ibuted   i n   a  big   c it y,  ob -
ta i n ing   m axim um   q u a l it y   is   de pen de nt  on   oth er   environ men -
ta lly   controvers ial   p rojec t s.  I n  t wo  ot he r   c as es,  t he   t re at me nt 
plants built are fed via open channels, mak ing the water intake 
v u l n e r a b l e   to   co n t a m i n a t i o n .   I n   a n o t h e r   c a s e,   t h e   w a te r   p ro -
duced  by  o ne  des al in atio n  pl ant   re ac h es   th e   muni ci pal  re se r-
vo i r s   a t   to o   h i g h   a   te m p e ra t u re   fo r   d o m e s t i c   u s e   ( s o m e t i m e s 
ove r 30 d egree s).

b o x   7

E x a mPlEs   o f   Pr o jEc t s   n ot   In   oP Er atIo n   bEc au sE
mIs sInG   lIn k s

  o f   

In spain, less than 20 % of the capacity of a desalination plant was being used four years after comple -
tion. despite there being sufficient demand to warrant increased water production, the conveyance 
system and urban distribution (and irrigation) networks, also co-financed by EU funds, were not in place 
at the time of the audit.

four years after the construction of a dam in greece, the complementary treatment plant required to 
make the project operational needs to be redesigned and constructed, thus delaying the functioning 
of the system.

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45.  

46.  

47.  

48.  

r E Po r tInG   o n   ac hI E V EmEn t s   h a s   bE En   o f 
lImItEd   Va luE

 fo r   c o m m i s s i o n - m a n a g e d   c f  p r o j e c t s   ( s e e   p a r a g r a p h   2 9 ) ,   a 
fina l  re po r t  has  to  b e  p res ented  at  co mpl et io n  as  a  co ndi ti on 
for final payment; for Erdf major projec ts, the regulation only 
re q u i re s   i n fo r m at i o n   to   b e   p rov i d e d   i n   t h e   re p o r t s   o f   t h e   o p -
erat io nal p rogram me wh ere t he s e pro jec t s  are  i n c lude d.

 the se   re po r ts  p rovide  p ar t l y  usef ul   in for mat ion   about   th e  re -
s u l t s   a c h i e v e d :   o n l y   f o r   o n e   p r o j e c t   a r e   r e s u l t s   d e s c r i b e d   i n 
t e r m s   o f   t h e   v o l u m e   o f   w a t e r   p r o d u c e d   a n d   s u p p l i e d   t o   t h e 
municipalities. I n t wo cases, the final repor ts merely state that 
the results have been achieved and, in one case, no information 
i s   p rov i d e d.   I n   f i ve   p ro j e c t s,   n o   re s u l t s   co u l d   b e   p rov i d e d   a s, 
alth ou g h t he  pro jec t s had b een  com ple ted,  t he y  we re  n ot  ye t 
ope rat io nal w hen the final  rep or t  was  pres e nte d.

 a s   r e g a r d s   t h e   a d d i t i o n a l   c o n d i t i o n s   o n   r e d u c t i o n   o f   w a t e r 
losse s imp os ed by t he c o mm ission ( see paragraph  32) ,  in  o ne 
of the four cases, the repor t does not contain any infor mation 
o n   t h e   e x te nt   to   w h i c h   t h e   co m m i s s i o n’s   co n d i t i o n   h a d   b e e n 
m e t .   ne v e r t h e l e s s,   t h e   c o m m i s s i o n   m a d e   t h e   f i n a l   p a y m e n t . 
I n  the  t wo   c ases   wh ere  the  commiss ion   had  imposed  spe cific 
follow-up requirements, in par ticular regarding the application 
o f   m e a s u re s   a g a i n s t   co nt a m i n at i o n   f ro m   a gr i c u l t u re   o r   wa s te 
water ( see p aragrap h 3 3) , no infor mat io n  was  prov ide d.

 s o far as projec ts subjec t only to M ember state approval were 
c o n c e r n e d,   o n l y   i n   t wo   o f   t h e   M e m b e r   s t a t e s   c ove re d   by   t h e 
audit were beneficiar ies required to submit a final repor t with 
th e  f in al   p ayment  claim.   M o reover,  th e se   re po r t s  ind i c ate  t he 
m a i n   c h a n g e s   a f fe c t i n g   t h e   p r o j e c t   i n   t e r m s   o f   c o s t   a n d   d e -
lays, b u t do no t  provid e details about t h e re sul ts  ach ie ved. I n 
t h e   o t h e r   t w o   M e m b e r   s t a t e s ,   f i n a l   p a y m e n t   c l a i m s   a r e   o n l y 
a c c o m p a n i e d   b y   s u p p o r t i n g   d o c u m e n t s   f o r   t h e   e x p e n d i t u r e 
incur red.

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ha V E  t hE   rEs u lt s   bE En   ac hI E V Ed   at  t hE  
lo W Es t   co s t  to  t hE   Eu   b u dG E t ?

49.  

 Most of the co -financed projec ts have contributed towards im-
p rov i n g   t h e   s u p p l y   o f   wate r   to   E U   c i t i ze n s.   I n   o rd e r   to   a s s e s s 
w h e t h e r   t h i s   re s u l t   co u l d   h ave   b e e n   a c h i e ve d   at   a   l owe r   co s t 
to the  EU bu dg et, the c o ur t  examined wh et her :

(a)  t h e   c o n s t r u c t i o n   o f   t h e   c o - f i n a n c e d   i n f r a s t r u c t u r e   h a d 

b een  car r ied o u t in an econ om ical  way ;

(b)   the infrastruc ture works efficiently, that is to say their rate 
of use is satisfac tor y and the rate of non-invoiced water in 
t he d ep endant water dis t r ibu tio n  ne t wor k  i s  accepta ble ;

(c)  whether the EU grant had been set at an appropriate level, 
tak ing into account that the co -financed projec ts generate 
revenu e.

50.  

51.  

52.  

E co n o m y   Is   a f fEc tEd   by   dEl ays   a n d 
co s t   o V Er r u n s

 I n   s e v e r a l   c a s e s   t h e   c o n t r a c t i n g   p r o c e d u r e s   w e r e   f o u n d   n o t 
to   co m p l y   w i t h   Eu ro p e a n   r u l e s   fo r   t h e   awa rd i n g   o f   co nt ra c t s. 
however, when this occurred, the  commission and the national 
control authorities did apply the appropriate correc tions to the 
co -f inanced  exp endit ure.

 all  p rojec t s   expe r ienced  del ays   in   t h ei r   con st r uc t ion ,   ran gin g 
from a few months to more than three years. I n most cases, de -
lays  c aus ed by additional  req ues ts  impo se d by e nv iron m enta l 
i m p a c t   a s s e s s m e n t s ,   d i f f i c u l t i e s   i n   o b t a i n i n g   a d m i n i s t r a t i v e 
per mit s,  inaccu rate es t imates or  c alc ulati on s  could h ave be e n 
par tl y  avoide d by b et ter p l anning.

 all  p roj ec t s  al so   exp er ien ced   cost   i n cre ase s  wh ich ,   i n   2 0   %  of 
the cases, were above 30 % of the initial price, with a maximum 
p r i ce   i n c re a s e   o f   8 0   %   i n   o n e   c a s e.  th e   m o s t   f re q u e n t   re a s o n 
fo r   t h e s e   co s t   ove r r u n s   w a s   p o o r   p l a n n i n g,   w h i c h   re s u l te d   i n 
d e l a y s   l e a d i n g   t o   p e n a l t i e s   t o   b e   p a i d   b y   p r o j e c t   p r o m o t e r s 
and  pr ice incre as es.

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s E V Er a l   Pr o jEc t s   oP Er atE  W It h   lImItEd 
Ef fIcI En c y

53.  

 two main efficienc y parameters used in the audit were the rate 
of use of the infrastruc ture and the rate of non-invoiced water 
in th e dep end ent  distr ib u tio n n et wor k s.

(a )  a low rate of use of the capacit y means that a smaller, less 
e x p e n s i v e   i n f r a s t r u c t u r e   m i g h t   h a v e   p r o v i d e d   t h e   s a m e 
l eve l  of  ser vice.

(b)   a high rate of non-invoiced water in the dependent distr i-
bution networks implies, in par ticular, losses. If investment 
h a d   s u c c e s s f u l l y   t a c k l e d   w a t e r   l o s s e s ,   l e s s   w a t e r   w o u l d 
ne ed to  be ex trac ted, treate d an d t ran s por ted  by t he  n ew 
infrastruc ture, which could therefore have been smaller in 
sc al e o r even no t needed  at  all.

54.  

55.  

 at   t h e   t i m e   o f   t h e   a u d i t,   2 1   co - f i n a n ce d   p ro j e c t s   h a d   b e e n   i n 
o p e r a t i o n   fo r   o n e   t o   fo u r   ye a r s,   t h r e e   we r e   s t a r t i n g   t o   o p e r -
a te   a n d   f i ve   we re   p hys i c a l l y   co m p l e te d   b u t   n o t   i n   o p e r a t i o n . 
 Table 3 assesses these projec ts against the two main efficienc y 
paramete rs.

 fo r   t h e   o p e r a t i o n a l   p ro j e c t s,   t h e re   i s   a   g re a t   v a r i a t i o n   i n   t h e 
rate at which the capacit y of the co -financed infrastruc tures is 
used — bet ween 100 % and 16 % — and in the level of non-in-
voiced water from the dependent distribution networks — from 
1 3   %   t o   5 5   % .   fo r   t h e   p u r p o s e   o f   t h i s   a n a l y s i s,   p ro j e c t s   w i t h 
s i m i l a r   c h a ra c te r i s t i c s   we re   p l a ce d   i n   o n e   o f   t h re e   c ate g o r i e s 
(see Ta ble  4).

56.  

 as s u m p t i o n s   re l at i n g   to   p ro j e c t s   h av i n g   a   l o n g e r   l i fe t i m e   a re 
i n h e r e n t l y   l e s s   r e l i a b l e   t h a n   t h o s e   f o r   s h o r t e r   l i f e t i m e s .   fo r 
projec ts which can be implemented in phases, implementation 
coul d  evo lve accordin g to  needs.

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ta b lE   3

as sEs s mEn t   o f  t hE   Pr o jEc t s   In   oP Er atIo n   a GaIn s t  t hE  
m aIn   Ef fIcI En c y   Pa r a mE tEr s

Type of project

Actual date of entry 
in operation

Horizon year of 
project

Rate of use of co-financed 
infrastructure  (%)

Rate of non-invoiced water 
in dependent distribution 
networks (%)

A

A / B

A

A

A

A

B

B

B

B

B

B / A

B / C

B

B / C

B

B

B

C

C

C

2006

2004

Mid-2008

2005

2005

Partially mid-2005

End 2000

Mid-2006

2008

November 2008

2004

2004

2006–09

2005

Mid-2008

2004

Mid-2008

2008

2006

2003

2005

2018

2020

2028

2015

2021

2012

2020

2027

2030

2015

2015

2030

2038

2016

2040

2040

2029

2028

2038

2040

2022

20,6

50,0

NA

NA

82,4

22,7

20,0

32,6

91,3

63,2

73,0

65,9

16,8

100,0

52,8

50,6

58,3

31–64

16,2

20–34

20,3

34,8

NA

NA

NA

21,0

26,0

16,8

55,5

High1

No data

26,0

27,0

25,8

High1

43,5

29,6

13,0

39,0

55,3

43,5

No data

No data

33,0

43,5

No data

high rate of use (x ≥ 70  %) or 
low rate of non-invoiced water 
(x ≤ 25 %)

Medium rate of use (40 % ≤ x < 70 %) 
or medium rate of non-invoiced 
water (25 % < x ≤ 40 %)

low rate of use (x < 40 %) 
or high rate of non-
invoiced water (x > 40 %)

na = non-applicable: projects in which the minimum size of pipes is imposed by technical standards.

1 

 there are no data regarding the level of non-invoiced water due to lack of meters. nevertheless, other information indicates that the 

efficiency of the distribution network is poor.

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ta b lE   4

Pr o jEc t  t y Po loGy   f o r   Ef fIcI En c y   a s sEs s mEn t

Description

Useful lifetime

Possibility to implement 
in phases

Type A

Type B

Type C

Treatment and desalination plants

15–20 years

Abstraction and transport infrastructure

30–50 years

Distribution networks

30–50 years

Yes

No

No

Picture 7: Desalination plant (type A)

Picture 8: Water transport infrastructure (type B)

Type of project

Actual date of entry 

Horizon year of 

Rate of use of co-financed 

in operation

project

infrastructure  (%)

Rate of non-invoiced water 

in dependent distribution 

networks (%)

A / B

82,4

20,6

A

A

A

A

A

B

B

B

B

B

B

B

B

B

C

C

C

B / A

B / C

B / C

Partially mid-2005

November 2008

Mid-2008

2006

2004

2005

2005

End 2000

Mid-2006

2008

2004

2004

2006–09

2005

Mid-2008

2004

Mid-2008

2008

2006

2003

2005

2018

2020

2028

2015

2021

2012

2020

2027

2030

2015

2015

2030

2038

2016

2040

2040

2029

2028

2038

2040

2022

91,3

63,2

73,0

65,9

16,8

100,0

52,8

50,6

58,3

31–64

20–34

16,2

20,3

34,8

NA

NA

NA

22,7

20,0

32,6

50,0

NA

NA

21,0

26,0

16,8

55,5

High1

No data

26,0

27,0

25,8

High1

43,5

29,6

13,0

39,0

55,3

43,5

No data

No data

33,0

43,5

No data

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Picture 9: Distribution network (type C)

32

21  the international standard 
for domestic use is 120–150 m3 

per household and year, which 

corresponds to 132–164 litres per 

inhabitant and day.

57.  

 with regard to the seven t ype a projec ts or projec ts including 
t y p e   a  e l e m e n t s   t h a t   h a d   b e e n   i n   o p e r a t i o n   fo r   a t   l e a s t   o n e 
year :

(a )  ca pa cit y : t hree p ro jec t s operate at  a  g oo d capa c it y, t hree 
at a medium level and one at a low level. since the lifetime 
o f   t h i s   t y p e   o f   i n f r a s t r u c t u r e   i s   r e l a t i v e l y   s h o r t ,   p r o j e c t s 
t h a t   a r e   c u r r e n t l y   u n d e r - u s e d   a r e   l e s s   l i k e l y   t o   r e a c h   a n 
a cce p t a b l e   l e ve l   o f   u s e ;   t h i s   co u l d   h ave   b e e n   avo i d e d   by 
i m p l e m e n t i n g   t h e   d e s a l i n a t i o n   o r   t r e a t m e n t   c a p a c i t y   i n 
p has es;

(b)   n o n - i nv o i c e d   w a t e r :   fo r   t w o   o f   t h e   p r o j e c t s ,   t h e   l e v e l   o f 
n o n - i n v o i c e d   w a t e r   i s   v e r y   h i g h .   I n   o n e   c a s e   t h e   r a t e   i s 
ove r   5 0   %   a n d,   i n   a n o t h e r,   a l t h o u g h   w a te r   d i s t r i b u te d   to 
c o n s u m e r s   i s   n o t   m e t e r e d ,   a   p e r   c a p i t a   c o n s u m p t i o n   o f 
5 5 0  l i t r e s   p e r   d a y   i m p l i e s   t h a t   l o s s e s   i n   t h e   n e t w o r k   a r e 
l ikel y  to b e ve r y high 21.

58.  

 wi t h   re g a rd   t o   t h e   1 3   t y p e   b  p ro j e c t s   o r   p r o j e c t s   c o n t a i n i n g 
t ype b elements that had been in operation for more than one 
yea r :

(a)  ca pa cit y : o ne  p rojec t op erate s at m ax im um  ca pa c it y, four 
p r o j e c t s   o p e r a t e   a t   m e d i u m   r a t e   a n d   e i g h t   a t   l o w   r a t e . 
the  re aso ns  fo r  this   l evel   of   pe r for m ance   a re  t he   h ig h  es-
t i m a t e s   o f   f u t u r e   d e m a n d   ( s e e   Ta b l e   2)   a n d   t h e   l a c k   o f 
co ord inat io n among diffe rent aut h or it ie s i n  c harge  of  t he 
w a t e r   s u p p l y   s y s t e m s   ( s e e   B ox   8 ) .  t h e r e   a r e   a l s o   s e v e r a l 
c a s e s   w h e re,   d e s p i te   s i gn e d   a gre e m e nt s,   t h e   s u p p l y   p ro -
v i d e d   i s   n o t   u s e d   o r   m u n i c i p a l i t i e s   h ave   w i t h d r aw n   t h e i r 
co mmit me nt  to  u se th e wate r ;

(b)   n o n - i nvo i ce d   wate r :   exce p t   i n   o n e   c a s e,   e f f i c i e n c y   i s   a l s o 
s e ve re l y   a f fe c te d   by   m e d i u m   o r   l ow   p e r fo r m a n c e ;   i n   t wo 
o th er case s, no  dat a were available.

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59.  

60.  

 finally, for the five projec ts of t ype c or containing t ype  c ele -
ments, the rate of use of the capacit y is not assessed, because 
t h e r e   i s   l i t t l e   s c o p e   fo r   m o d i f y i n g   t h e   s i z e   o f   t h e   p i p e s ,   d u e 
to   te c h n i c a l   re a s o n s.   as   re g a rd s   t h e   r a te   o f   l o s s e s,   t h e   n e w l y 
installed sec tions of the network achieve good results of about 
1 0   % .   ho we ve r,   t h e   r a t e   o f   n o n - i nvo i c e d   w a t e r   i n   t h e   o ve r a l l 
u r b a n   d i s t r i b u t i o n   n e t w o r k   c o n t i n u e s   t o   b e   h i g h   o r   m e d i u m 
(from   abo u t  30  to   4 5  %)  in  t hree   c as es   be c aus e  on ly   a   lim ite d 
par t  of  the  net wor k has  be en re n ovate d.

22  article 7 of regulation (Ec)  
no 1164/94 and article 29 of 

regulation (Ec) no 1260/1999.

P r o cEs s   f o r   sE t tInG   Gr a n t   r atEs   s h o W s 
sI GnIfIc a n t   W Ea k nEs sEs  …

 t h e   r e g u l a t i o n s   g o v e r n i n g   t h e   s t r u c t u r a l   fu n d s   a n d   t h e   c o -
h e s i o n   fu n d   l ay   d ow n   t h e   r u l e s   fo r   s e t t i n g   co m m u n i t y   f i n a n-
cial assistance. the EU grant cannot exceed specific ceilings 22. 
wit hin t he  limit s o f thes e ceil in gs,  t he  le ve l of  commun it y as-
sista nce  in  reven ue - generat ing   proje c t s  i s   d ete r mi ne d  on   t h e 
b a s i s   o f   t h e   f i n a n c i n g   g a p   m e t h o d :   t h e   g r a n t   c a n n o t   e xc e e d 
the difference between the discounted costs of the investment 
a n d   t h e   d i s c o u n t e d   n e t   re ve n u e s   o f   t h e   p ro j e c t .  t h i s   a i m s   a t 
ens ur ing  t hat  t he p ro jec t  receive s t he  re source s n ee de d to  be 
imp l em ente d wit hout  unju st if ied  ove r- fi n anc i n g.

b o x   8

E x a mPlEs   o f   lo W   r atE   o f   u sE   o f   In f r a s t r u c t u rE   d uE  to   l ac k 
o f   co o r dIn atIo n   bE t W E En   au t h o rItI Es

one regional authority promoted the renovation of the water main for a supply system delivering bulk 
water to several municipalities and co-financed by the Erdf. at the same time, the main municipality 
involved built a desalination plant, which was also co-financed by the Erdf. the water main was only 
used at a rate of 58 % in the first year of operation. a decision was taken to discontinue the desalination 
plant in May 2010, only four years after commissioning.

In another Member state, a new bulk water supply system was promoted by a state-owned company 
and co-financed by the cf. however, the municipalities to be supplied by this system required their 
local infrastructures to be incorporated into the system. Moreover, in the end, the largest municipality 
refused to be supplied by the new system. as a result, the rate of use of the co-financed infrastructure 
is currently less than 25 %.

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23  Except in two projects submitted 
before 1999 for which the financing 

gap method was not applicable.

24  this situation has already been 
highlighted in a previous report 

of the court; see in particular 

paragraphs 21 to 34 of special 

report no 1/2008 concerning the 

procedures for the preliminary 

examination and evaluation of 

major investment projects for  

the 1994–99 and 2000–06 

programme periods.

61.  

62.  

 for all cf projects and Erdf major projects examined, the grant 
a p p l i c a t i o n s   p re s e n te d   to   t h e   co m m i s s i o n   by   M e m b e r   s t a te s 
( s e e   p a r a g r a p h   8 )   i n c l u d e d   a   f i n a n c i a l   c o s t - b e n e f i t   a n a l y s i s 
(c b a) .   a l l   t h e   a p p l i c a t i o n s   re q u e s t e d   a s s i s t a n c e   o n   t h e   b a s i s 
of the financing gap rate resulting from the cba 23. the EU con-
t r i b u t i o n   v a r i e d   f ro m   4 0   %   to   8 5   %   o f   t h e   to t a l   e l i gi b l e   co s t s 
of t he  pro jec t.

 fo r   t h e   o t h e r   E r d f   p ro j e c t s   e x a m i n e d   ( n o t   s u b m i t t e d   fo r   i n -
divid ual  grant ap p roval s  to t he commiss ion), on ly greece an d 
por tugal requested that a cba be provided by the projec t pro -
moters as par t of the documentation accompanying the appli-
c at i o n s.   howe ve r,   t h e   co - f i n a n c i n g   rate   wa s   d e te r m i n e d   i r re -
spec tive of the cbas. I n most cases the projec ts were awarded 
t h e   m a x i m u m   c o - f i n a n c i n g   r a t e   g r a n t e d   t o   t h e   o p e r a t i o n a l 
p r o g r a m m e   m e a s u r e   i n   w h i c h   t h e y   w e r e   i n c l u d e d .  t h e   g r a n t 
r a t e   fo r   t h e s e   p r o j e c t s   v a r i e d   f r o m   4 0   %   t o   8 0   %   o f   t h e   t o t a l 
eligib l e co st s.

63.  

 d u r i n g   t h e   a u d i t ,   t h e   c o u r t   fo u n d   s i g n i f i c a n t   w e a k n e s s e s   i n 
t h e   f i n a n c i a l   a n a l ys e s   p rov i d e d   i n   s u p p o r t   to   M e m b e r   s t ate s’ 
grant  a pp lic at io ns 24.

(a ) 

I n   fo u r   o f   t h e   1 1   c b a s   p ro v i d e d   t o   t h e   co m m i s s i o n ,   c o n-
t ra r y   to   t h e   r u l e s   o f   t h e   f i n a n c i n g   g a p   m e t h o d,   d e p re c i a-
t i o n   h a d   b e e n   i n c l u d e d   i n   t h e   c a l c u l a t i o n   o f   o p e r a t i o n a l 
e x p e n d i t u re.   as   a   re s u l t ,   i n   t wo   c a s e s,   t h e   gra nt   ra te   w a s 
s e t   a t   a ro u n d   t w i ce   t h e   l e ve l   i t   s h o u l d   h ave   b e e n ,   a n d   i n 
t he t wo o t her cas es,  at about 5 0  %  a bove  th at  l evel.

(b)   I n   m o s t   o f   t h e   c a s e s   w h e re   p ro j e c t s   fo r m   p a r t   o f   a   w i d e r 
w a t e r   s u p p l y   s y s t e m ,   n o   o v e r v i e w   o f   t h e   o v e r a l l   s y s t e m 
was provided although this was necessar y for the financial 
e v a l u a t i o n   o f   t h e   p a r t   p re s e n t e d   fo r   c o - f i n a n c i n g.   M o re -
over,  t he  o p erating  co st s   an d  reve nues   us ed   i n   th e  an aly-
s e s   we re   d e r i ve d   a s   a   p ro - r a t a   o f   t h e   w i d e r   w a t e r   s u p p l y 
systems to which the co -financed projec ts belonged; only 
in one case were the assumptions based on the ac tual data 
o f t he wate r sup p l y system.

(c)  s o m e   f i g u r e s   p r o v i d e d   i n   t h e   c b a s   w e r e   u n r e a l i s t i c ;   f o r 
example, constant volumes and prices were used in almost 
al l  cas es.  fur t her mo re, the  commiss ion did not asse ss th e 
so u ndnes s of  t he cba s’ es timates of t he ope rating  cos ts.

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25  see ‘guide to cohesion fund, 
2000–06’, version 1,  

february 2000 — annex c.

64.  

65.  

66.  

...  a n d   d oEs   n ot  ta kE   s u f fIcI En t   acco u n t 
o f  t hE   a bIlIt y   o f  t hE   Pr o jEc t s  to   G EnEr atE  
rE V En uE

 I n   t h e   wate r   s u p p l y   s e c to r,   t h e   re ve n u e s   a re   t a r i f fs   a n d   o t h e r 
charges paid by the various t ypes of user. these revenues have 
a n   i m p a c t   o n   t h e   r a t e   o f   c o m m u n i t y   a s s i s t a n c e   a s   t h e y   c o n-
t r i b u t e   t o w a r d s   r e d u c i n g   t h e   f i n a n c i n g   g a p   o f   a   p r o j e c t .   to 
assess whether a grant rate is set at a level which avoids over-
f i n a n c i n g   a n d   e n s u r e s   t h e   e f f i c i e n t   u s e   o f   E U   r e s o u r c e s ,   t h e 
a b i l i t y   o f   a   p r o j e c t   t o   g e n e r a t e   r e v e n u e s   m u s t   b e   t a k e n   i n t o 
acco u nt.

 I n   2 0 0 0 ,   t h e   c o m m i s s i o n   d e c i d e d   t h a t   t h e   r a t e   o f   a s s i s t a n c e 
should be adjusted to encourage the introduc tion of charging 
s ys te m s   cove r i n g   t h e   co s t s   o f   o p e rat i n g,   m a i nt a i n i n g   a n d   re -
placing infrastruc tures as well as the costs of pollution abate -
ment 25.

 the cour t ’s review of the sampled projec ts found that, in most 
cases, the rate granted was merely the rate applied for. Except 
in one  case  (see B ox  9 ),  no at te nt ion  was paid  to t he  c hargin g 
s y s t e m s ,   w h i c h   a l l o w e d   f o r   v e r y   l o w   r e c o v e r y   r a t e s .   I n   m o s t 
o f   t h e   c a s e s   t a r i f fs   o n l y   c o ve re d   t h e   o p e r a t i n g   c o s t s   a n d   n o t 
th e tot al  inve st ment  cos t  bo r ne  by th e n ati on al public an d E U 
fundin g.

b o x   9

a   c a sE  WhErE  t hE   co s t   rEco V Er y   PrIn cI PlE  Wa s  ta kEn 
In to   acco u n t

In one grant application the Member state had explained that it had set up a system to recover a signifi-
cant part of the costs from the users. recognising the effort made, the commission decided to co-finance 
at a rate of 75 %, even though the financing gap resulting from the financial analysis had been fixed at 
52 %. the financial surplus was due to be used for improving other water infrastructure.

the commission’s decision was aimed at encouraging good practices, but this was not consistent with 
the financing gap method for setting the EU financial assistance.

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67.  

 the   co ur t ’s  review   o f  t he  t ar if fs  for  water   s er vi ces   also   found 
that :

(a )  M e m b e r   s t a t e s   t e n d   t o   m a x i m i s e   E U   f i n a n c i a l   a s s i s t a n c e 
b y   k e e p i n g   t a r i f f   l e v e l s   l o w.   I n   o n e   c a s e   t h e   t a r i f f s   h a d 
no t   be en  u p dated  since  t he  19 9 0 s.  th ere  are  cases  whe re 
water tariffs were set by national authorities only af ter de -
te r min ing   t he  m axim um  expec ted   amo unt  o f  E U  f i nan ci al 
a s s i s t a n ce.   U n d e r   t h e s e   c i rc u m s t a n ce s,   t h e   c b as   s u b m i t -
t e d   t o   t h e   c o m m i s s i o n   j u s t i f y   e x   p o s t   t h e   a m o u n t   o f   t h e 
grant expec ted, instead of determining it as a result of the 
anal ysis  ma de;

(b) 

in rel at ive  ter ms,  the tar iffs set in  th e are as  s er ve d by t he 
p ro j e c t s   a u d i t e d   a c c o u n t   fo r   l e s s   t h a n   1   %   o f   t h e   h o u s e -
hold disposable income. the commission never questioned 
t h e   p o te nt i a l   to   re cove r   co s t s   f ro m   u s e r s   a s   p re s e nte d   i n 
t he ap p l icatio ns,  no r p rop ose d any  s peci fi c  ben c hm ar k  to 
assess the appropriateness of the water prices put for ward. 
M oreover, there appears to be no cor relation bet ween the 
a m o u n t   o f   t h e   h o u s e h o l d   i n c o m e   u s e d   t o   p a y   f o r   w a t e r 
s e r v i c e s   a n d   t h e   c o - f i n a n c i n g   r a t e .   h i g h e r   c o - f i n a n c i n g 
r a t e s   a r e   o b s e r v e d   b o t h   i n   a r e a s   w h e r e   t h e   u s e r s’  w a t e r 
e x p e n d i t u r e   i s   l o w e r   i n   r e l a t i o n   t o   t h e i r   i n c o m e ,   a n d   i n 
areas where this ratio is higher, without any par ticular jus-
t ificatio n be ing  given  (s ee Gra ph  1 an d  A nnex  III).

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37

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Water expenditure as % of household income

special report no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

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38

68.  

69.  

70.  

 the pr inciple of charging water costs to users is strengthened 
b y   t h e   w a t e r   f r a m e w o r k   d i r e c t i v e ,   w h i c h   e s t a b l i s h e s   a n   o b -
l i g a t i o n   r e g a r d i n g   c o s t   r e c o v e r y   fo r   w a t e r   s e r v i c e s   a s   a n   i n-
ce nt i ve   fo r   s t i m u l at i n g   s u s t a i n a b l e   d e m a n d   by   t h e   u s e r s.  th e 
obligation is due to be applied by 2010. the cost recover y can 
howe ver be  modu l ated by t ak ing  i nto  acco unt  var i ous f ac tor s 
such   as ‘ t he   s o cial,  enviro nmenta l  an d   e con omic   ef fec t   of   th e 
r e c o v e r y   a s   w e l l   a s   t h e   g e o g r a p h i c   a n d   c l i m a t i c   c o n d i t i o n s’ 
o f   t h e   re gi o n s   a f fe c te d 2 6.   I n   o t h e r   wo rd s,   t h e   o b j e c t i ve   i s   n o t 
neces sar ily to  ac hieve 100 % cos t re cove r y   from  use r s 27.

  More explicit rules were established by the commission in 2006 28, 
i n   a cco rd a n ce   w i t h   co u n c i l   r e g u l a t i o n   ( E c )   n o   1 0 8 3 / 2 0 0 6   o n 
the struc tural funds 29. the new guidance specified that ‘tariffs 
should at least cover operating and maintenance costs, as well 
a s   a   s i gn i f i c a nt   p a r t   o f   t h e   a s s e t s’  d e p re c i at i o n’.   an   a d e q u ate 
ta r if f st ruc tu re  s houl d b e envisa ge d to m axi mi se  th e pro j ec t ’s 
r e v e n u e s   b e f o r e   p u b l i c   s u b s i d i e s ,   w h i l e   t a k i n g   a f f o r d a b i l i t y 
into account. a commonly accepted affordability ratio for water 
supp l y and sa nit at ion  is  4 % of h ouse h old i n come 30.

 as regards the new programme period, the four Member states 
covered by this audit have all set up procedures requiring that 
proposals for water infrastruc tures whose total cost is greater 
th an o ne mil l io n euro sh oul d provid e a fi n anc i a l cb a. I n t hree 
o f   t h e   r e g i o n s   v i s i t e d ,   t h e   n e w   n a t i o n a l   p r o c e d u r e s   r e q u i r e 
that a specific analysis of water tariff levels should be included 
i n   t h e   c b a s.   ho we ve r,   o n l y   i n   po r t u g a l   h ave   c l e a r   r u l e s   b e e n 
e s t a b l i s h e d   t o   d e t e r m i n e   t h e   a m o u n t   o f   t h e   g r a n t ,   b a s e d   o n 
how the cost recover y principle is applied by the municipalities 
concer ned. the  a ffo rdab il it y  l eve l  for  water   se r v ice s  has   be en 
defined in both relative terms (tariffs as a percentage of house-
hol d inco me) and ab so l u te ter ms  (m ax imum pr i ce  pe r m 3) .

26  article 9.1 of the water framework 
directive (directive 2000/60/Ec).

27  see ‘common implementation 
strategy for the water framework 

directive — guidance document  

no 1’, 2004.

28  European commission, ‘the new 
programming period 2007–13 — 

guidance on the methodology 

for carrying out cost-benefit 

analyses — working document 

no 4’, 8/2006. this guidance was 

prepared according to article 40(e) 

of regulation (Ec) no 1083/2006. 

see also ‘guidance note on  

article 55 of council regulation  

(Ec) no 1083/2006: revenue 

generating projects’.

29  see article 55 of council 
regulation (Ec) no 1083/2006 of 

11 july 2006 laying down general 

provisions on the European regional 

development fund, the European 

social fund and the cohesion fund 

and repealing regulation (Ec)  

no 1260/1999 (oj l 210, 31.7.2006, 

p. 25).

30  a review carried out by the Ebrd 
presents benchmarks ranging from 

2,5 % in the Usa up to 5 % for the 

world bank. see fankhauser, s. and 

s. tepic. 2007: ‘can poor consumers 

pay for energy and water? an 

affordability analysis for transition 

countries’. wp no 92, Ebrd 2005.  

Energy policy. 35:1038–1049.

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conclUsIons and
rEcoMMEndatIons

39

71.  

 whilst structural measures spending has contributed to improv-
ing   t he  su p pl y  of  water   for  dome s tic   us e,  be tte r   res ult s  coul d 
have  b een achieved at  a a l ower   cos t to t he  E U bud ge t.

solutIons adoPtEd

72.  

 all the projects examined were designed on the basis of studies 
o f   c u r r e n t   a n d   f u t u r e   w a t e r   n e e d s .   h o w e v e r,   b e t t e r   a n a l y s e s 
c o u l d   h a v e   m a d e   i t   p o s s i b l e   t o   b u i l d   s m a l l e r   c a p a c i t y   i n f r a-
s t r u c t u re   a n d   c o n s i d e r   a l t e r n a t i ve   s o l u t i o n s   t h a t   m i g h t   h ave 
pro du ced be tter effec ts.

(a)  Es tim ates  o f fut ure water needs di d  n ot t ake i nto account 
either downward trends in water consumption or all avail-
ab l e res ou rces ( see p aragraphs  1 8  to  24 ) .

(b)   I n general, the analyses of possible solutions were limited 
to  su p pl y side  measu res,  pay in g  li ttl e  attenti on  to t he  re -
d u c t i o n   o f   w a t e r   l o s s e s   a n d   t h e   u s e   o f   m o r e   a c c e s s i b l e 
res ou rces (s ee p aragrap hs  25  to 2 8 ).

(c)  s o m e t i m e s ,   t h e   c o m m i s s i o n’s   r e v i e w   l e d   t o   c o n d i t i o n s 
( m o s t l y   c o n c e r n i n g   t h e   r e d u c t i o n   o f   w a t e r   l o s s e s )   b e i n g 
added to the grant decisions; its inter vention could, how -
e ve r,   h ave   b e e n   m o re   e f fe c t i ve ;   l i t t l e   va l u e   wa s   a d d e d   by 
the Member states’ managing authorities. for the 2007–13 
period, fewer projec ts will be examined by the commission 
and more by the managing author ities (see paragraphs 29 
to  35).

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rEc o m m E n d atIo n   1

(a) t h e m e m b e r s t a t e s sh o ul d:

(i) 

i m p r o v e   t h e i r   e x - a n t e   a n a l y s e s   a n d   fo r e c a s t s   o f   f u t u r e 
w a t e r   n e e d s   b y   t a k i n g   i n t o   a c c o u n t   r e c e n t   a n d   a c c u-
rate  d at a ( in par t icu l ar by  tak ing  i nto con sid erati on  t he 
d o w n w a r d   t r e n d s   i n   p e r   c a p i t a   c o n s u m p t i o n )   a n d   i m-
p ro ve   t h e i r   i nve n t o r y   a n d   re v i e w   o f   a l l   a v a i l a b l e   w a t e r 
res ou rces;

(ii)  p ay   gre ate r   at te nt i o n   to   a l te r n at i ve s   to   t h e   s u p p l y   s i d e 
s o l u t i o n s ,   f o r   e x a m p l e   b y   t a k i n g   i n t o   a c c o u n t   t h e   p o -
t e n t i a l   fo r   r e d u c i n g   w a t e r   l o s s e s ,   t a k i n g   a c t i o n   o n   t h e 
demand side, implementing measures for the protec tion 
o f water  qualit y.

(b)  t h e c o m m i s s i o n sh o ul d:

(i)  

i n   d e c i d i n g   w h e t h e r   t o   g r a n t   f i n a n c i a l   s u p p o r t   t o 
p r o j e c t s ,   s y s t e m a t i c a l l y   a s s e s s   w h e t h e r   a l l   n e c e s s a r y 
m e asu r e s   f o r   e f f i c i e nt   w ate r   r e s o u rce   m a n a g e m e nt   a r e 
imp l e m e nte d  in  th e  are as  co n ce r n e d .   I t  sh o ul d   als o  e n -
su r e   t h at   t h e   e f f e c t   o f   t h e s e   m e asu r e s   is   t a ke n   i nto   a c-
co unt   in   th e  w ate r  n e e ds ’  f o re c as t s   an d  ass e ssm e nt s  o f 
al te r nati ve s un d e r p innin g  th e p roj e c t s;

(ii)  encourage member states’ managing authorities to give 
d u e   c o n s i d e r a t i o n   t o   e f f i c i e n t   w a t e r   re s o u rc e   m a n a g e -
ment in the areas concer ned by the water infrastruc ture 
co -f inanced.

73.  

74.  

ac hIE VEmEnt of aIm s

 t h e   c o - f i n a n c e d   p r o j e c t s   a r e   c o n t r i b u t i n g   t o w a r d s   i m p r o v e -
m e n t s   i n   t h e   w a t e r   s u p p l y   t o   E U   c i t i z e n s   i n   t h e   a r e a s   c o n -
cerned. however, although some projec ts had been completed 
s e v e r a l   y e a r s   b e f o r e   t h e   a u d i t   t o o k   p l a c e ,   t h e y   w e r e   n o t   i n 
operation because of missing links in the water supply network 
(see p aragra phs  41  to  44 ).

 t h e   c u r re n t   m o n i t o r i n g   p ro c e d u re s   a n d   t o o l s   a re   o n l y   p a r t l y 
u s e f u l   fo r   i n fo r m i n g   t h e   co m m i s s i o n   a n d   t h e   M e m b e r   s t a te s’ 
managing author ities about the achievements of the projec ts. 
w h e re   t h e   co m m i s s i o n   h a s   i m p o s e d   p a r t i c u l a r   c o n d i t i o n s,   i t 
h a s   n o t   a l w a y s   a d e q u a t e l y   c h e c k e d   w h e t h e r   t h e y   a r e   i m p l e -
mented (se e p aragrap hs  45 to 4 8) .

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special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

 
 
41

rEc o m m E n d atIo n   2

(a)  t h e m e m b e r s t a t e s sh o ul d:

(i)  ensure, from the planning stage, that the complementar y 
i n f r a s t r u c t u r e   r e q u i r e d   fo r   t h e   e n t r y   i n t o   o p e r a t i o n   o f 
t he p ro jec t s is avail ab l e on  time ;

(ii)  set up better monitoring tools to assess projec t achieve -

me nt s.

(b)  t h e c o m m i s s i o n sh o ul d:

(i)  define the information it needs from the member states 

to  as ses s t he imp ac t  o f th e  relate d  proje c ts ;

(ii)  c a r e f u l l y   a s s e s s   t h e   i m p l e m e n t a t i o n   o f   t h e   c o n d i t i o n s 

imp o sed in t he  grant dec ision s.

 cost  to  thE Eu budGE t

75.  

 the objec tives could have been achieved at a lower cost to the 
EU b u dge t.

(a )  s e ve r a l   p ro j e c t s   h ave   e n c o u n t e re d   d e l ay s   a n d   c o s t   ove r -
r u n s   w h i c h   co u l d   h ave   b e e n   avo i d e d   at   l e a s t   to   s o m e   e x-
te nt  (s ee p aragrap hs  5 0 to 5 2 ).

(b)  s eve ra l  pro je c ts o p erate at a c apac it y t hat  is  to o low, as  a 
co n s e q u e n ce   o f   wate r   d e m a n d   b e i n g   l owe r   t h a n   fo re c a s t 
and high levels of non-invoiced water in the overall supply 
sys tem s (see  p aragrap hs 5 3 to 5 9 ) .

(c)  t h e   p r o c e s s   fo r   s e t t i n g   g r a n t s   s h o w e d   s i g n i f i c a n t   w e a k-
n e s s e s   a n d   n o   a s s e s s m e n t   w a s   m a d e   o f   t h e   p o t e n t i a l   fo r 
co st  recover y f rom u ser s (se e  paragraph s  6 0  to  7 0 ) .

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

 
42

rEc o m m E n d atIo n   3

(a)  t h e m e m b e r s t a t e s sh o ul d:

(i)  pay more attention, during the planning phase, to factors 
which of ten cause delays, such as environmental impac t 
as ses sme nt s, adminis t rative per m it s, an d  es ti mate s and 
ca lc ul atio ns fo r t he p rojec t s;

(ii)  improve the quality of the ex ante analyses of the projects 
and take their results into account when determining the 
size  o f new  in fras truc tu res ;

(iii) sys tem at ic al ly anal ys e the pros an d  con s  of  build i ng  i n-
frastruc ture in stages, with the aim of mak ing better use 
o f   t h e   c a p a c i t y   b u i l t ,   a n d   d e v e l o p   i t   a c c o r d i n g   t o   t h e 
evo l u tio n o f ne eds.

(b)  t h e c o m m i s s i o n sh o ul d:

(i)  pay more attention to the quality of the financial analysis 
a c c o m p a n y i n g   t h e   g r a n t   a p p l i c a t i o n s   a n d   r e q u e s t   t h e 
info r mat ion it needs to s et th e grant  at th e  a ppropr iate 
l evel ;

(ii)  ensure an adequate application of the cost recover y prin-

cip l e to  inc rease the eff icient us e  of  E U fu nds.

t his r e p o r t w as a d o p te d by chamb e r I I , h ea d e d by M r M o r te n 
l E v ys o h n ,   M e m b e r   o f   t h e   co u r t   o f   au d i to r s ,   i n   lu xe m b o u r g 
at i t s  m e e tin g  o f  8  s e p te m b e r 2010.

Fo r  th e  Co u r t o f   Au dito r s

vítor Manuel da sIlva cald EIra 
Presi d e nt

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

43

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special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44

EU fund

CF

Total elegible 
cost
(million euro)

ERDF/CF 
contribution
(million euro)

79,42

60,88

4,69

1,48

3,75

1,11

a n nEx   II

Pr o jEc t s   sElEc tEd   f o r  t hE   au dIt

Country

Project title

Water supply of Thessaloniki from Aliakmon river, 
ΥΔΡΕΥΣΗ ΘΕΣΣΑΛΟΝΙΚΗΣ ΑΠΟ ΤΟΝ ΠΟΤΑΜΟ ΑΛΙΑΚΜΟΝΑ

Renovation of external aqueduct of municipalities in 
Pieria region, ΑΝΑΚΑΙΝΙΣΗ ΕΞΩΤΕΡΙΚΟΥ ΥΔΡΑΓΩΓΕΙΟΥ 
ΥΔΡΕΥΣΗΣ ΣΥΝΔΕΣΜΟΥ ΚΟΙΝΟΤΗΤΩΝ ΝΟΜ. ΠΙΕΡΙΑΣ

ERDF — OP Central
Macedonia

Water supply in Litohoro, ΥΔΡΕΥΣΗ - ΑΠΟΧΕΤΕΥΣΗ 
ΛΙΤΟΧΩΡΟΥ

ERDF — OP Central
Macedonia

Greece

Greece

Greece

Greece

External and internal water supply network in Kozani, 
ΕΣΩΤΕΡΙΚΑ ΚΑΙ ΕΞΩΤΕΡΙΚΑ ΔΙΚΤΥΑ ΥΔΡΕΥΣΗΣ ΔΗΜΟΥ 
ΚΟΖΑΝΗΣ, ΤΗΛΕΕΛΕΓΧΟΣ, ΤΗΛΕΧΕΙΡΙΣΜΟΣ ΚΑΙ ΕΛΕΓΧΟΣ 
ΔΙΑΡΡΟΩΝ

CF

18,60

13,90

Greece

Water supply Deskati, ΥΔΡΕΥΣΗ ΔΕΣΚΑΤΗΣ

ERDF — OP Western 
Macedonia

4,02

3,21

Internal network for water distribution of Ptolemaida 
and external network for water distribution in Mavro-
pigi, Asvestopetra and Proastio, ΤΡΟΦΟΔΟΤΙΚΟΣ ΑΓΩΓΟΣ 
ΕΣΩΤΕΡΙΚΟΥ ΔΙΚΤΥΟΥ ΥΔΡΕΥΣΗΣ Δ.Δ. ΠΤΟΛΕΜΑΪΔΑΣ 
ΚΑΙ ΕΞΩΤΕΡΙΚΟ ΔΙΚΤΥΟ ΥΔΡΕΥΣΗΣ ΟΙΚΙΣΜΩΝ 
ΜΑΥΡΟΠΗΓΗΣ, ΑΣΒΕΣΤΟΠΕΤΡΑΣ ΚΑΙ ΠΡΟΑΣΤΙΟΥ ΤΟΥ 
ΔΗΜΟΥ ΠΤΟΛΕΜΑΪΔΑΣ

ERDF — OP Western 
Macedonia

2,40

1,92

Adduttrice Acque Grezze Rosamarina

Completamento collegamenti esterni tra i serbatoi  
di Palermo

ERDF — OP Sicily

ERDF — OP Sicily

Rete di distribuzione, sottorete 5 Libertà

ERDF — OP Sicily

Rifacimento Acquedotto Favara di Burgio

ERDF — OP Sicily (MP)

5° modulo bis Dissalatore di Gela

ERDF — OP Sicily

2a Fase do Sistema multimunicipal de abastecimento de 
água à Área Sul do Grande Porto - Grupo I: Alargamento 
à região do Vale do Sousa

Abastecimento de água ao Sector Norte do concelho e 
reforço do abastecimento à sede do concelho de Arcos 
de Valdevez

Abastecimento de água da Área a Sul da cidade de 
Barcelos-4ª Fase

Abastecimento de Água a Guimarães - Sistemas de 
Adução e Reservas - Fase II

CF

ERDF — OP Norte

ERDF — OP Norte

ERDF — OP Norte

13,69

12,34

13,00

32,96

32,86

49,88

4,28

3,54

2,43

6,16

5,14

5,42

13,28

14,79

42,40

3,21

2,30

1,58

Greece

Italy

Italy

Italy

Italy

Italy

Portugal

Portugal

Portugal

Portugal

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

45

Country

Project title

EU fund

Total eligible 
cost
(million euro)

ERDF/CF 
contribution
(million euro)

Abastecimiento a Zaragoza y corredor del Ebro

Abastecimiento a Lleida y su zona desde el embalse de 
Santa Ana

CF

CF

Abastecimiento y planta potabilizadora  de Jaca

ERDF — OP Aragón

Desaladora de Cartagena (también conocida como  
San Pedro del Pinatar1)

Conexión de la desaladora del Campo de Cartagena 
(también conocida como Valdelentisco) con el Canal de 
Cartagena

CF

ERDF — OP Murcia

Mejora de la potabilizadora de Campotejar

ERDF — OP Murcia

Abastecimiento al Alfoz de Murcia, conducción Este

ERDF — OP Murcia

Abastecimiento a Sevilla (presa de Melonares)

Abastecimiento a la zona Norte de Córdoba  
(presa de La Colada)

Spain

Norte de Córdoba

Desaladora de Carboneras

CF

CF

ERDF — OP
Andalucia (MP)

ERDF — OP
Andalucia

Abastecimiento a las comarcas de la Ribera (parcial n° 2)

CF

Depósito de agua potable de Carcaixent (Ribera)

ERDF — OP Valencia

Abastecimiento de la Plana Baixa de Castellón

ERDF — OP Valencia

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

Spain

79,86

24,50

4,73

55,10

19,71

5,38

1, 89

64,60

20,60

22,20

115,30

15,13

0,49

10,08

67,88

12,24

2,36

46,90

12,81

3,50

1,23

54,90

15,48

15,54

57,60

12,10

0,31

6,55

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

46

a n nEx   II I

h o u sEh o l d  WatEr   ExP En dIt u rE   a n d   dIsPo s a b lE   In co mEs    
In  t hE   a rEa s   sEr V Ed   by  t hE   Pr o jEc t s

Project

Area/ 
municipality 
concerned

Project rate of 
co-financing 
(%)

Expenditure for 
standard an-
nual household 
consumption of 
120 m3 incl. VAT1, 2

Price per m3 (based 
on consumption 
120 m 3  per year)  
in euro, incl. VAT

Annual household 
disposable income3

Water expenditure 
(incl. VAT) as % of 
household dispos-
able income

GR 1

Thessaloniki

GR 2

GR 3

GR 4

GR 5

GR 6

Pidna

Elafina

Methoni

Litohoro

Kozani city4

Kozani districts4

Deskati

Ptolemaida4

Mavropigi

Asvestopetra

Proastio

IT 1

Palermo area

IT 2, 3

IT 4, 5 

Palermo city

Agrigento

IT 4, 5

Caltanissetta

Felgueiras

Lousada

Paços de Ferreira

Paredes

Arcos de 
Valdevez

Barcelos

Guimarães

Vizela

PT 1

PT 2

PT 3

PT 4

77

80

75

75

80

80

45

42

40

45

85

75

65

65

97,30

89,02

77,62

62,23

35,21

149,76

105,61

44,60

159,96

72,11

90,90

55,20

85,84

85,84

176,88

197,27

88,83

134,97

202,73

113,27

101,68

165,94

145,26

145,26

0,81

0,74

0,65

0,52

0,29

1,25

0,88

0,37

1,33

0,60

0,76

0,46

0,72

0,72

1,47

1,64

0,74

1,12

1,69

0,94

0,85

1,38

1,21

1,21

30 168

30 168

30 168

30168

30 168

31 665

31 665

31 665

31 665

31 665

31 665

31 665

40 617

40 617

32 725

37 288

33 086

24 557

26 928

27 446

17 548

29 066

31 672

28 337

0,32

0,30

0,26

0,21

0,12

0,47

0,33

0,14

0,51

0,23

0,29

0,17

0,21

0,21

0,54

0,53

0,27

0,55

0,75

0,41

0,58

0,57

0,46

0,51

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

47

Project

Area/ 
municipality 
concerned

Project rate of 
co-financing 
(%)

Expenditure for 
standard an-
nual household 
consumption of 
120 m3 incl. VAT1, 2

Price per m3 (based 
on consumption 
120 m 3  per year)  
in euro, incl. VAT

Annual household 
disposable income3

Water expenditure 
(incl. VAT) as % of 
household dispos-
able income

85

50

50

85

65

65

85

75

70

50

80

80

ES 1

ES 2

ES 3

Zaragoza

Lleida

Jaca

Cartagena

ES 4

Torre Pacheco

San Javier

Cartagena 

Mazarrón

Murcia

Seville

North Cordoba

North Cordoba

Carboneras

Alzira

Cuillera

ES 5

ES 6, 7

ES 8

ES 9

ES 10

ES 11

ES 12

ES 13

Carcaixent

Moncofa

Burriana

Vila-real

ES 14

Vall d’Uixo

65

Nules

Betxi

Onda

71,07

70,66

63,56

219,36

150,54

164,80

219,36

97,98

207,47

119,56

92,91

92,91

122,69

45,56

98,46

53,25

194,78

108,82

73,50

132,83

92,73

157,02

53,59

0,59

0,59

0,53

1,83

1,25

1,37

1,83

0,82

1,73

1,00

0,77

0,77

1,02

0,38

0,82

0,44

1,62

0,91

0,61

1,11

0,77

1,31

0,45

43 738

44 839

48 494

34 597

34 597

34 597

34 597

34 597

34 597

36 201

34257

34 257

40 619

37 178

37 178

37 178

39 618

39 618

39 618

39 618

39 618

39 618

39 618

0,16

0,16

0,13

0,63

0,44

0,48

0,63

0,28

0,60

0,33

0,27

0,27

0,30

0,12

0,26

0,14

0,49

0,27

0,19

0,34

0,23

0,40

0,14

1 

 according to international studies, 120 m3/year/household (approx. 132 l/day/person) can be considered as a standard consumption. 

calculation based on prices of 2008 and in greece of 2009.

2  vat of 10 % in Italy, of 7 % in spain and portugal; in greece vat of 9 % applies to water tariff, 19 % to fixed and special fee.
3 

 calculated as disposable income per capita (at nUt s2, or nUt s3 if available) multiplied by average number of persons in a household. 

 It: average number of persons in household; source: family components in sicily, Ist at 2003. disposable income per capita; source: valore 

aggiunto per abitante, Ist at 2006. 

gr: disposable income of private households in 2006 (at nUt s3 level, in purchasing power standards); source: Eurostat 2009. average size of 

the household. 

source: household budget survey 2004, greek statistical office. 

pt: average size of household based on census 2001 data. disposable income based on purchasing power per capita 2005 in regions and 

average income level of (1 032 = 100). 

source: statistical office of portugal. 

Es: average size of household in nUt s3 - source continuous survey of family budgets, data of 2005. gross disposable income of households in 

2006, spanish regional accounts, national Institute of statistics. 

for jaca, source: Instituto aragonés de Estadística (data of 2005).

4 

 for calculation of total water expenditure, a half a special fee was taken into account besides fixed and volumetric fee in case of kozani and 

ptolemaida (law on dEya provides for a special fee of 80 % of water tariff for future investments in water supply and sewerage infrastructure).

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

ExEcutIVE summary

III.
t h e   E u r o p e a n   r e g i o n a l   d e v e l o p m e n t 
f u n d   ( Er d f)   a n d   c o h e s i o n   f u n d   ( c f) 
c o - f i n a n c e d   i n   2 0 0 0 – 0 6   w e l l   o v e r   1 0 0 
p ro j e c t s   i n   t h e   f i e l d   o f   wate r   s u p p l y   a i m-
ing  to  imp rove  th e  management  of   wate r 
resources.

t h e   f i n a n c i n g   o f   s u c h   p r o j e c t s   n e e d s 
t o   b e   a s s e s s e d   i n   t h e   f r a m e w o r k   o f   t h e 
n a t i o n a l   p l a n s   o r   s t r a t e g i c   f r a m e w o r k s 
t h a t   c o h e s i o n   M e m b e r   s t a t e s   ( i n   t h i s 
c a s e ,   gr e e c e ,   sp a i n ,   I t a l y   a n d   po r t u g a l ) 
t r a n s m i t t e d   t o   t h e   c o m m i s s i o n   a t   t h e 
b e g i n n i n g   o f   t h e   2 0 0 0 – 0 6   p ro g r a m m i n g 
per iod.   

I n   a d d i t i o n ,   M e m b e r   s t a t e s   h a v e   o t h e r 
f i n a n c i a l   r e s o u r c e s ,   i n   p a r t i c u l a r   o w n 
r e s o u r c e s ,   d e d i c a t e d   t o   w a t e r   s u p p l y 
measures and the follow-up and monitor-
ing of  suc h proj ec ts.

IV.
t h e   c o m m i s s i o n   r e c a l l s   t h a t   w h e n   t h e 
a u d i t e d   p r o j e c t s   w e r e   p r e p a r e d   a n d 
i m p l e m e n t e d   t h e r e   w a s   n o   h a r m o n i s e d 
f r a m e w o r k   a t   E U   l e v e l   f o r   t h e   m a n a g e -
ment of water  res ources.

su c h   a   f r a m e w o r k   h a s   b e e n   e s t a b l i s h e d 
b y   di r e c t i v e   2 0 0 0 / 6 0 / Ec,   k n o w n   a s   t h e 
w a t e r   f r a m e w o r k   d i r e c t i v e .   t h i s   d i r e c t -
i ve   e nte re d   i nto   fo rce   i n  d e ce m b e r   2 0 0 0 , 
h a d   to   b e   t ra n s p o s e d   by   d e ce m b e r   2 0 0 3 , 
w h i l e   i t s   s u b s t a n t i a l   o b l i g a t i o n s   we re   to 
be imp l emented  by the end o f 2 0 0 9 .

48

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V.
t h e   c o m m i s s i o n   w e l c o m e s   t h e   c o u r t ’s 
co n c l u s i o n   a cco rd i n g   to   w h i c h   t h e   s t r u c-
t u r a l   m e a s u r e s ’  s p e n d i n g   h a s   c o n t r i b -
uted to improving the supply of water for 
domes tic  use.

on   t h e   b a s i s   o f   s u b s i d i a r i t y   a n d   s h a r e d 
m a n a g e m e n t ,   M e m b e r   s t a t e s   h a v e   t h e 
p r i m a r y   re s p o n s i b i l i t y   fo r   t h e   s e l e c t i o n , 
i m p l e m e nt at i o n   a n d   m o n i to r i n g   o f   Er d f  
p ro j e c t s.   I n   a d d i t i o n ,   w i t h   re g a rd   t o   t h e 
c f  p r o j e c t s   a n d   m a j o r   Er d f  p r o j e c t s , 
w h i c h   a r e   e x a m i n e d   a n d   a p p r o v e d   b y 
t h e   c o m m i s s i o n ,   t h e   c o m m i s s i o n   i n t e r -
ve nt i o n   i s   co n d i t i o n e d   by   t h e   a p p l i c a b l e 
l e g a l   f r a m e w o r k   ( e . g .   t h e   c o m m i s s i o n’s 
appraisal has to ensure that they are con-
s i s t e n t   w i t h   t h e   a p p l i c a b l e   E U   l e g i s l a-
tion ).

V. firs t  indent
t h e   c o m m i s s i o n   n o t e s   t h a t   t h e r e   h a s 
b e e n   a   g ro w i n g   a w a re n e s s   o f   d o w nw a rd 
t r e n d s   i n   w a t e r   c o n s u m p t i o n .   no n e t h e -
l e s s,   t h i s   wa s   n o t   e v i d e nt   i n   t h e   p ro j e c t s 
r e v i e w e d   b y   t h e   c o u r t ,   a s   t h e s e   t r e n d s 
we re   n o t   we l l   re co gn i s e d   i n   t h e   1 9 9 0 s   o r 
e a r l y   2 0 0 0 s ,   w h e n   t h e   a u d i t e d   p r o j e c t s 
w e r e   p r e p a r e d   a n d   i m p l e m e n t e d .   t h e 
d ow nwa rd   t re n d   h a s   b e e n   re co gn i s e d   by 
t h e   c o m m i s s i o n   i n   i t s   r e c e n t   c o m m u n i-
c at i o n s 1  i n   re l at i o n   to   wate r   s c a rc i t y   a n d 
droughts, adopted  in  20 07  an d 2 0 0 8 .

t h e   c o m m i s s i o n   u n d e r l i n e s   t h a t   i t   c a n-
n o t   i m p o s e   s p e c i f i c   a l te r n at i ve   s o l u t i o n s 
a n d   c a n n o t   re p l a c e   t h e   wo r k   o f   n a t i o n a l 
a u t h o r i t i e s ,   w h i c h   a r e   r e s p o n s i b l e   f o r 
s e l e c t i n g   p ro j e c t s   a n d   gra nt i n g   d e ve l o p -
ment con sent.

1  see communication from the commission ‘addressing the 
challenge of water scarcity and droughts in the European 

Union’, coM(2007) 414, and report from the commission to the 

council and the European parliament on the ‘follow-up to the 

communication on water scarcity and droughts in the European 

Union’, coM(2008) 875.

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

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no n e t h e l e s s ,   t h e   c o m m i s s i o n   h a s   c o -
financed specific projec ts with the objec -
t i v e   t o   r e d u c e   w a t e r   l e a k a g e   a n d   w a t e r 
deman d in t his p er iod.

V. second indent
t h e   c o m m i s s i o n   w e l c o m e s   t h e   c o u r t ’s 
c o n c l u s i o n   t h a t   m e a s u r a b l e   i m p r o v e -
m e n t s   h a v e   b e e n   a c h i e v e d   i n   m a n y 
areas.

V. thi rd inde nt
w h i l e   t h e r e   w e r e   l i m i t e d   w e a k n e s s e s   i n 
s e t t i n g   g r a n t   r a t e s   i n   t h e   p a s t ,   r e s u l t -
i n g   f ro m   d e f i c i e n c i e s   i n   t h e   co s t- b e n e f i t 
an alys es  (c bas),   th e  le ga l  f ramewor k  and 
t h e   c o m m i s s i o n’s   g u i d e l i n e s   h a v e   b e e n 
streng t he ned for the 2007– 13  p er i od.

V I. s econd  ind ent
t h e   co m m i s s i o n   c o n s i d e r s   t h a t   t h e   p ro -
g r e s s i v e   i m p l e m e n t a t i o n   o f   t h e   w a t e r 
framework direc tive, which was not appli-
cable for the audited projec ts and period, 
i n   p a r t i c u l a r   t h e   p r i n c i p l e   o f   re cove r y   o f 
t h e   c o s t s   o f   w a t e r   s e r v i c e s,   w i l l   c o n t r i b -
u t e   s i g n i f i c a n t l y   t o w a r d s   i n c r e a s i n g   t h e 
efficient use of EU funds as regards water 
s u p p l y   p r o j e c t s .   t h e   c o m m i s s i o n   w i l l 
s c r u t i n i s e   t h e   i m p l e m e n t a t i o n   b y   M e m-
ber  s tates  of  t his pr in ciple.

I n   i t s   c o m m u n i c a t i o n   o n   w a t e r   s c a r c i t y 
and droughts, adopted in 2007, the com-
m i s s i o n   h a s   s t r e s s e d   t h e   i m p o r t a n c e   o f 
identifying and implementing prevention 
m e a s u r e s   ( e. g.   w a t e r   s a v i n g,   a l t e r n a t i v e 
solutions, water  pr ic ing  polic y ) .

th e   co m m i s s i o n   a l s o   n o te s   t h e   l e n g t h   o f 
t i m e   n e e d e d   f o r   t h e   f u l l   f u n c t i o n i n g   o f 
such co mp l ex infrastruc t ure p ro j ec ts.

VI. firs t inde nt
t h e   c o m m i s s i o n   a g r e e s   t h a t   t h e   i d e n t i-
f i e d   i s s u e s   a r e   i m p o r t a n t   e l e m e n t s   t o 
e n s u r e   t h e   o v e r a l l   s u s t a i n a b i l i t y   o f   t h e 
regions co ncer ned.

V I. t hird  ind ent
the commission suppor ts such an objec t-
i ve.   I nve s t m e nt s   i n   wate r   i n f ra s t r u c t u re s 
a r e   c o m p l e x   p r o j e c t s ,   w h i c h   a r e   o f t e n 
d e ve l o p e d   i n   p h a s e s.  w h i l e   s h o r t   d e l ay s 
m a y   b e   j u s t i f i e d   i n   b u i l d i n g   a n d   l i n k i n g 
i n f r a s t r u c t u r e s ,   t h e   c o m m i s s i o n   a g r e e s 
w i t h   t h e   c o u r t   t h a t   s u c h   d e l a y s   s h o u l d 
be avoided or  re duced.

t h e   co m m i s s i o n   c o n s i d e r s   t h a t   t h e   p ro -
g r e s s i v e   i m p l e m e n t a t i o n   o f   t h e   w a t e r 
f r a m e w o r k   d i r e c t i v e   w i l l   s i g n i f i c a n t l y 
c o n t r i b u t e   t o w a r d s   a d d r e s s i n g   t h e s e 
issu es.

the  cor rec t  implementation  of  the  direc t-
i v e s   o n   e n v i r o n m e n t a l   a s s e s s m e n t 
o f   p l a n s   a n d   p r o g r a m m e s   (di r e c t i v e 
2 0 0 1 / 4 2 / Ec )   a n d   o f   p r o j e c t s   (di r e c t i v e 
8 5 / 3 3 7 / E Ec,   a s   a m e n d e d )   a re   re l e va nt   i n 
th is reg ard.

V I. fou r t h  ind ent
t h e   c o m m i s s i o n   r e f e r s   t o   i t s   r e p l y   t o   v I  
th ird in dent above.

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8 .
on   t h e   b a s i s   o f   di re c t i ve   8 5 / 3 3 7 / E Ec,   o n 
e nv i r o n m e n t a l   i m p a c t   a s s e s s m e n t   ( E Ia ) , 
a s   a m e n d e d ,   t h e   c o m m i s s i o n   t a k e s   i n t o 
co n s i d e rat i o n   t h e   re s u l t s   o f   t h e   e nv i ro n-
m e n t a l   a s s e s s m e n t   c a r r i e d   o u t   b y   t h e 
c o m p e t e n t   n a t i o n a l   a u t h o r i t i e s   b e f o r e 
t h e   a u t h o r i s a t i o n   o f   a   p ro j e c t .  t h e   e nv i-
r o n m e n t a l   e v a l u a t i o n / c o n s e n t   c o n t a i n s 
a l l   r e l e v a n t   e n v i r o n m e n t a l   i n f o r m a t i o n 
and is based on several technical studies. 
th e   a p p rova l   o f   co h e s i o n   fu n d   p ro j e c t s, 
m a j o r   p r o j e c t s   a n d   o p e r a t i o n a l   p r o -
grammes is conditioned by the favour able 
o p i n i o n   o f   v a r i o u s   di r e c t o r a t e s - g e n e r a l 
c o n c e r n e d ,   i n c l u d i n g   t h e   di r e c t o r a t e - 
g e n e r a l   fo r   t h e   E nv i r o n m e n t ,   w h i c h   h a s 
m o r e   s p e c i f i c   k n o w l e d g e   a n d   e x a m i n e s 
aspec t s par t icular to th e impleme ntat io n 
b y   t h e   M e m b e r   s t a t e s   o f   v a r i o u s   d i r e c t -
i v e s ,   i n c l u d i n g   w a t e r   m a n a g e m e n t   o r 
oth er  environ mental aspec ts.

8 .  (a)
t h e   a s s e s s m e n t   o f   t h e   c o m m i s s i o n   w a s 
carried out on the basis of the rules appli-
cable at the time of the submission of the 
application. the rules have changed since 
t h e   l a s t   p ro gra m m e   p e r i o d.  th e   d e s c r i p -
t i o n   o f   t h e   c o u r t   r e f e r s   t o   t h e   p e r i o d 
2 00 0–0 6 .   

f o r   t h e   2 0 0 7 – 1 3   p e r i o d ,   t h e   c o h e s i o n 
fu n d   i s   b e t t e r   i n t e g r a t e d   i n t o   p r o g r a m-
m i n g.   pro j e c t s   b e l ow   t h e   5 0   m i l l i o n   e u ro 
threshold are not subjec t to the commis-
sion  appraisal. 

t h e   n e w   r u l e s ,   e n t e r e d   i n t o   f o r c e   o n 
2 5   ju n e   2 0 1 0   ( a r t i c l e   3   o f   r e g u l a t i o n 
( E U )   n o   5 3 9 / 2 0 1 0 ) ,   e n a b l e   a   m o r e   s t r a -
t e g i c   a p p r o a c h   t o   t h e   d e v e l o p m e n t   o f 
c o - f i n a n c e d   p r o j e c t s ,   i n c l u d i n g   m a j o r 
p r o j e c t s   ( i . e .   p r o j e c t s   w i t h   i n v e s t m e n t 
costs  of over  5 0 million  eu ro) .

VI. fif t h inde nt
t h e   r e g u l a t o r y   f r a m e w o r k   f o r   2 0 0 7 – 1 3 
h a s   r e i n f o r c e d   t h e   p r o c e d u r e   f o r   s u b -
m i s s i o n ,   a n a l ys i s,   a p p rova l   a n d   m o n i to r-
i n g   o f   m a j o r   p r o j e c t s .   t h e   c o m m i s s i o n 
h a s   t a k e n   s p e c i f i c   s t e p s   t o   s t r e n g t h e n 
t h e   c o s t - b e n e f i t   a n a l y s i s   ( c b a )   f r a m e -
wo r k   a n d   f i n a n c i n g   g a p   a n a l ys i s   by   m a k-
i n g   a v a i l a b l e   t o   M e m b e r   s t a t e s   s p e c i f i c 
g u i d a n ce   a n d   to o l s.   I n   2 0 0 8 ,   i t   p u b l i s h e d 
a n   u p d a t e   o f   t h e   c o s t - b e n e f i t   a n a l y s i s 
g u i d e,   w h i c h   i n c l u d e s   a   m e t h o d o l o g y   to 
b e   a p p l i e d   s y s t e m a t i c a l l y   b y   t h e   M e m-
ber states. two g uida nce n o tes  were also 
p u b l i s h e d   o n   c b a  a n d   o n   re ve n u e   g e n e r -
atin g  pro je c ts. 

t h e   c o m m i s s i o n   c o n s i d e r s   t h a t   t h e s e 
steps improve significantly the qualit y of 
cbas s ub m itte d by t he M emb er s tates.

IntroductIon

2. 
the commission notes that the needs and 
challenges in water supply and resources’ 
p l a n n i n g   a r e   m u c h   m o r e   i m p o r t a n t   i n 
souther n Europe 2. this element is equally 
t a k e n   i n t o   a c c o u n t   i n   t h e   o v e r a l l   p l a n-
n i n g   a n d   a l l o c a t i o n   o f   f u n d s   i n   n e g o t i a-
tions wit h M e mb er s t ate s. 

3.
t h e   i n d i v i d u a l   p r o j e c t s   s u b j e c t   t o   t h e 
c o u r t ’s   a u d i t   w e r e   n o t   c o v e r e d   b y   t h e 
water framewor k direc tive as its substan-
t i a l   o b l i g a t i o n s   we re   to   b e   i m p l e m e n te d 
by t he  end of 2 00 9.

2  see also communication from the commission ‘addressing 
the challenge of water scarcity and droughts in the European 

Union’, coM(2007) 414, and final report from the commission 

to the council and the European parliament on the ‘follow-up 

to the communication on water scarcity and droughts in the 

European Union’, coM(2008) 875.

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

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2 3.
t h e   co m m i s s i o n   u n d e r l i n e s   t h a t ,   o n   t h e 
b a s i s   o f   s u b s i d i a r i t y   a n d   s h a re d   m a n a g e -
m e n t ,   i t   c a n n o t   i m p o s e   s p e c i f i c   a l t e r n a-
t i v e   s o l u t i o n s   a n d   c a n n o t   r e p l a c e   t h e 
w o r k   o f   n a t i o n a l   a u t h o r i t i e s ,   w h i c h   a r e 
r e s p o n s i b l e   f o r   s e l e c t i n g   p r o j e c t s   a n d 
grant ing d evelopment con sent. 

su g g e s t i n g   d i f fe re nt   s o l u t i o n s   o r   s m a l l e r 
c a p a c i t y   i n f r a s t r u c t u re   i s   e ve n   m o re   d i f-
f i c u l t   i n   t h e   a r e a   o f   w a t e r   m a n a g e m e n t , 
w h i c h   i s   p e r   s e   s e n s i t i v e   ( i . e .   u n a n i m i t y 
w a s   n e c e s s a r y,   u n d e r   t h e   p r e v i o u s   E c 
tre a t y,   re g a rd i n g   d e c i s i o n s   o n   q u a n t i t a -
t i ve   m a n a g e m e nt   o r   ava i l a b i l i t y   o f   wate r 
resources) .

the commission also refers to its reply to 
paragraph  8.

b ox 2 . first  p aragrap h
t h e   s e l e c t i o n   o f   E r d f   p r o j e c t s   i s   t h e 
n a t i o n a l   a u t h o r i t i e s ’  r e s p o n s i b i l i t y.   a s 
t h i s   w a s   n o t   a   m a j o r   p r o j e c t ,   t h e   c o m -
m i s s i o n   d i d   n o t   a p p r a i s e   a n d   a p p ro ve   i t 
direc t ly.

b ox 2 . s eco nd  paragraph
t h i s   d a m   w i l l   b e   f u n c t i o n i n g   f ro m   2 0 1 0 . 
t h i s   p r o j e c t   w a s   d e c i d e d   t a k i n g   i n t o 
a c c o u n t   t h e   d r o u g h t s   i n   sp a i n   a n d   i t s 
pr ior inclusion in the national hydrologic 
p l a n .   a l t e r n a t i v e s   n o t   t o   c o n s t r u c t   t h e 
dam were evaluated by the M ember state 
i n   t h e   a p p l i c at i o n   fo r m   p re s e nte d   to   t h e 
co m m i s s i o n ,   b u t   t h e y   p re s e n t e d   c e r t a i n 
d i f f i c u l t i e s,   s u c h   a s   h i g h   e n e rg y   u s e   a n d 
o t h e r   co m m i t m e nt s   fo r   t h e   wate r   s u p p l y 
of th ose alte r natives.

2 4.
t h e   c o m m i s s i o n   r e f e r s   t o   i t s   r e p l y   t o 
para graph  2 3. 

I t is true that ac tual data show that there 
i s   a   d o w nw a r d   t r e n d   i n   w a t e r   c o n s u m p -
t i o n ,   co nt ra r y   to   t h e   e x   a n te  e va l u at i o n s. 
ho w e v e r,   t h i s   e s s e n t i a l   e l e m e n t   c o n-
f i r m e d   i n   e a r l y   2 0 0 0   c o u l d   n o t   a l w a y s 
b e   t a k e n   i n t o   a c c o u n t   f o r   t h e   a u d i t e d 
projec ts.

9.
t h e   c o m m i s s i o n   i n t e n t i o n s   w i t h   t h e 
g u i d e l i n e s   w a s   t o   e x p re s s   g o o d   p r a c t i c e 
t h a t   M e m b e r   s t a t e s   w e r e   e n c o u r a g e d 
t o   c o n s i d e r.  t h e   c o m m i s s i o n   g u i d e l i n e s 
we re   a d o p te d   w h i l e   t h e   l e gi s l at i ve   p ro c -
e s s   f o r   t h e   w a t e r   f r a m e w o r k   d i r e c t i v e 
w a s   o n g o i n g,   a n d   we re   t h e re fo re   a   n o n -
b i n d i n g   p r o v i s i o n a l   r e f e r e n c e   t h a t   w a s 
s u p e r s e d e d   w h e n   t h e   d i r e c t i v e   e n t e r e d 
i n t o   a p p l i c a t i o n .   s e e   a l s o   r e p l y   t o   p a r a-
graph  3.

audIt scoPE and objEctIVEs

14 .
t h e   c o m m i s s i o n   p o i n t s   o u t   t h a t   t h e 
2 9  p r o j e c t s   r e p r e s e n t   a   t o t a l   c o - f i n a n c -
i n g   by   c o h e s i o n   p o l i c y   o f   4 8 8 , 4 5   m i l l i o n 
euro or 13,5  % of the total investments in 
water  sup p ly  in  t he  fou r  au dited   M e mbe r 
s t a te s.   fo r   t h e   p e r i o d   a u d i te d,   t h e   co m-
m i s s i o n   e x a m i n e d   t h e   q u a l i t y   o f   i n d i-
v i d u a l   p r o j e c t s   s u b m i t t e d   b y   M e m b e r 
s t a t e s   o n l y   f o r   c o h e s i o n   fu n d   p r o j e c t s 
a n d   m a j o r   Er d f  p r o j e c t s ,   m e a n i n g   t h a t 
i t   e x a m i n e d   1 1   o f   t h e   2 9   p ro j e c t s   o f   t h e 
sample.

obsErVatIons

21 –22 .
t h e   c o m m i s s i o n   u n d e r l i n e s   t h a t   i n   t h e 
a u d i t e d   p e r i o d   o f   2 0 0 0 – 0 6   t h e   fo re c a s t s 
we re   m o s t l y   e l a b o rate d   a cco rd i n g   to   t h e 
e x i s t i n g   s t a n d a r d s .   su b s e q u e n t   d o w n-
w a rd   t re n d s   o b s e r ve d   i n   p e r   c a p i t a   c o n-
sumption could not have been taken into 
a c c o u n t   f o r   t h e   a u d i t e d   p r o j e c t s   w h i c h 
w e r e   a p p r o v e d   f r o m   1 9 9 5   t o   2 0 0 7 .   t h e 
r e q u e s t   f o r   a n   i n c r e a s e d   a t t e n t i o n   o n 
w a t e r   e f f i c i e n c y   w a s   h i g h l i g h t e d   i n   a n 
E U   p o l i c y   d o c u m e n t   i n   2 0 0 7 ,   w h i c h   a l s o 
c o i n c i d e s   w i t h   t h e   y e a r   o f   a d o p t i o n   o f 
the commission communication on water 
scarcit y  and drou ghts 3.

3  see communication from the commission ‘addressing the 
challenge of water scarcity and droughts in the European Union’, 

coM(2007) 414.

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2 9.
t h e   c o m m i s s i o n   n o t e s   t h a t   t h e   e v a l u a-
t i o n   c a r r i e d   o u t   w a s   b a s e d   o n   t h e   c o m-
p a t i b i l i t y   o f   t h e   p r o j e c t   w i t h   c o m m u-
n i t y   e n v i r o n m e n t a l   l e g i s l a t i o n   i n   f o r c e  
a t   t h e   t i m e ,   i n   p a r t i c u l a r   di r e c t i v e s 
8 5 / 3 3 7 / E Ec  ( o n   t h e   a s s e s s m e n t   o f   e n v i-
r o n m e n t a l   i m p a c t s ) ,   8 0 / 7 7 8 / E Ec  ( d r i n k -
i n g   w a t e r )   a n d   9 1 / 6 7 6 / E Ec  ( n i t r a t e s ) . 
direc tives 98/83/Ec and 2000/60/Ec were 
a d o p t e d   a n d   a p p l i e d   a t   a   l a t e r   d a t e .   I n 
t h e   a b s e n c e   o f   E U   l a w s   ‘ h a r m o n i s i n g ’ 
applicable environmental rules, the com-
m i s s i o n’s   e v a l u a t i o n   c a n   o n l y   b e   b a s e d 
o n   n a t i o n a l   r u l e s ,   w h i c h   m a y   v a r y   f r o m 
M em ber s tate to M embe r s tate.

fo r   t h e   re i n fo rce d   p ro ce d u re s   a p p l i c a b l e 
i n   t h e   p e r i o d   2 0 0 7 – 1 3 ,   t h e   c o m m i s s i o n 
refer s to its  reply  to paragraph  3 5 ( a) .

th e   co m m i s s i o n   a l s o   re fe r s   to   i t s   re p l i e s 
to paragraph s 8  an d 8( a).

3 0.
fo r   t h e   p e r i o d   2 0 0 7 – 1 3 ,   t h e   co m m i s s i o n 
h a s   d e v e l o p e d   a   c h e c k l i s t   f o r   i n t e r n a l 
u s e   d u r i n g   m a j o r   w a te r   a n d   w a s te   w a te r 
p ro j e c t s’  a p p ra i s a l,   fo r   a s s e s s i n g   co n s i s t-
e n c y   w i t h   t h e   e nv i ro n m e n t a l   a cq u i s  a n d 
p o l i c y.   howe ve r,   o n l y   m a j o r   p ro j e c t s   a re 
n o w   s u b j e c t   t o   a   c o m m i s s i o n   d e c i s i o n 
(projec ts in this sec tor - above 50 million 
euro) .

3 1.
t h e   c o m m i s s i o n’s   r e v i e w   o f   p r o j e c t s   i s 
b a s e d   o n   s o c i o e c o n o m i c   f a c t o r s ,   t h e 
coherence and consistenc y of the projec t, 
the degree of matur it y and deliverabilit y, 
u s i n g   t e c h n i q u e s   s u c h   a s   c o s t - b e n e f i t 
a n a l y s i s   a n d   i n t e r n a l   r a t e   o f   r e t u r n .  t h e 
c o m m i s s i o n   c a r r i e s   o u t   t h e   f i n a l   e v a l u-
a t i o n   b a s e d   o n   t h e   f a c t   t h a t   t h e   p r o j e c t 
is operational and in confor mit y with the 
in itial decision.

25 .
t h e   c o m m i s s i o n   a g r e e s   o n   t h e   i m p o r -
t a n ce   o f   i d e n t i f y i n g   a l l   p o s s i b l e   a l te r n a-
tive  so l ut ions.

I t   u n d e r l i n e s   t h o u g h   t h a t   t h e   f o c u s   o n 
w a t e r   e f f i c i e n c y   a n d   t h e   p o l i c y   r e q u e s t 
fo r   i n c r e a s e d   a c t i o n s   o n l y   g a i n e d   m a j o r 
p o l i c y   a t t e n t i o n   t o w a r d s   t h e   e n d   a n d 
a f te r   t h e   2 0 0 0 – 0 6   p e r i o d,   i . e.   m u c h   a f te r 
t h e   p e r i o d   i n   w h i c h   t h e   a u d i te d   p ro j e c t s 
were de signed and im pl emented.

tw o   e s s e n t i a l   f a c t o r s   s h o u l d   b e   h i g h-
l i g h t e d   i n   t h i s   r e s p e c t :   t h e   e x i s t i n g 
framework which defines the role and the 
r e s p o n s i b i l i t i e s   o f   t h e   c o m m i s s i o n   a n d 
the  su b sidiar it y p r inc ipl e. 

wi t h   r e g a r d   t o   t h e   n i n e   c f  p r o j e c t s   a n d 
t w o  Er d f  p r o j e c t s ,   w h i c h   w e r e   e x a m-
ined and  app roved by  t he  co mmiss ion, it 
s h o u l d   b e   s t re s s e d   t h a t   t h e   co m m i s s i o n 
c a n n o t   i m p o s e   s p e c i f i c   s o l u t i o n s   a n d 
r e p l a c e   t h e   n a t i o n a l   a u t h o r i t i e s ,   w h i c h 
are responsible for granting development 
consent fo r a pro jec t.

th e   co m m i s s i o n   a l s o   re fe r s   to   i t s   re p l i e s 
to pa ragrap hs  8 and 23.

b ox 5
t h e   f i r s t   c a s e   c o n c e r n s   a n   Er d f  p r o j e c t 
which was examined and approved by the 
nat ion al au th or ities.

I n   t h e   s e c o n d   c a s e   e x a m i n e d   b y   t h e 
co m m i s s i o n ,   r e s o u r c e s   a v a i l a b l e   fo r   t h e 
a r e a   ( a q u i f e r s )   w e r e   c o n t a m i n a t e d   a n d 
t h e   n a t i o n a l   a u t h o r i t i e s   i n d i c a te d   i n   t h e 
a p p l i c a t i o n   fo r m   s u b m i t t e d   t o   t h e   co m-
mission that it was prac tically impossible 
to   o b t a i n   co n ce s s i o n s   fo r   n e a r by   s u r f a ce 
water.

I n   a n y   c a s e ,   t h e   c o - f i n a n c e d   i n f r a s t r u c -
t u r e   c a n   b e   a l s o   u s e d   i n   t h e   f u t u r e   i n 
c o n j u n c t i o n   w i t h   a q u i f e r s   f o r   s u r f a c e 
water fro m t his area.

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I n   a d d i t i o n ,   t h e   g u i d e   t o   c o s t - b e n e f i t 
a n a l ys i s   i s s u e d   i n   2 0 0 2   p rov i d e s   s p e c i f i c 
guidance on the design and development 
of water su pp l y p ro jec ts.

fu r t h e r m o re,   t h e   co m m i s s i o n   c o m m u n i-
c a t i o n   i n   r e l a t i o n   t o   w a t e r   s c a r c i t y   a n d 
droughts was ado p ted in  20 07 .

t h e   E U   ja s p e r s   f a c i l i t y   p r o v i d e s   t e c h n i-
c a l   a s s i s t a n ce   to   t h e   n e w   M e m b e r   st ate s 
when they are prepar ing to submit major 
p r o j e c t s   t o   t h e   c o m m i s s i o n .   t h e r e   i s   a 
c o n t r a c t   w i t h   o u t s i d e   s e c t o r a l   e x p e r t s 
w h o   c a n   b e   c o n s u l t e d   o n   t e c h n i c a l   a n d 
s o c i o e c o n o m i c   a s p e c t s   o f   p ro j e c t   a p p l i-
cation s.

4 0.
t h e   c o m m i s s i o n   a g r e e s   w i t h   t h e   c o u r t 
t h at   t h e   s ys te m at i c   u s e   o f   t h e   i n d i c ato r s 
to   m e a s u re   t h e   a c h i e ve m e n t   o f   p ro j e c t s’ 
objec tives is central to a well-func tioning 
m o n i to r i n g   a n d   e va l u at i o n   s ys te m .   how -
e v e r,   n o t   a l l   o b j e c t i v e s   c a n   b e   q u a n t i-
fied.

4 1–4 2 .
t h e   co m m i s s i o n   w e l c o m e s   t h e   o b s e r v a-
t i o n   t h at   a l l   p ro j e c t s   a u d i te d   we re   p hys i-
c a l l y   i m p l e m e n t e d   a s   p l a n n e d ,   d e s p i t e 
m i n o r   v a r i a t i o n s ,   a n d   t h a t   t h e   p r o j e c t s 
c o n t r i b u t e d   t o   i m p r o v e   t h e   w a t e r   s u p -
ply.

4 3.
M e m b e r   s t a t e s   h a v e   t h e   o b l i g a t i o n   t o 
i n fo r m   t h e   co m m i s s i o n   at   c l o s u re   o n   t h e 
u n f i n i s h e d   o r   n o n - o p e r a t i o n a l   p r o j e c t s 
a n d   u n d e r t a k e   t o   c o m p l e t e   o r   r e n d e r 
t h e m   o p e rat i o n a l.   no n e t h e l e s s,   fo r   Er d f  
p r o j e c t s   t h e y   h a v e   t o   o b s e r v e   t h i s   o b l i-
g a t i o n   t w o   y e a r s   a f t e r   t h e   d e a d l i n e s   fo r 
c l o s u r e .   t h u s ,   o n l y   a t   t h a t   t i m e   w i l l   t h e 
co m m i s s i o n   b e   i n   t h e   p o s i t i o n   t o   e s t a b -
l i s h   w h e t h e r   t h o s e   p r o j e c t s   a r e   o p e r -
at ion al an d e ligible for  co - finan ci ng.

s ee reply  to b ox 7.

the commission also refers to its reply to 
paragrap h 25.

33 .
wi t h   re g a rd   to   t h e   i n c l u s i o n   o f   a   s p e c i f i c 
c o n d i t i o n   ( m o n i t o r i n g   o f   t h e   a p p l i c a-
t i o n   o f   t h e   d i r e c t i v e s   o n   t h e   p r o t e c t i o n 
o f   s u r f a c e   a n d   u n d e r g r o u n d   w a t e r s ) , 
t h i s   c o n d i t i o n   i s   re d u n d a n t ,   a s   i t   s i m p l y 
re p e at s   o b l i g at i o n s   re s u l t i n g   f ro m   e x i s t -
i n g   E U   l e gi s l at i o n .  th i s   t y p e   o f   co n d i t i o n 
is therefore no longer used.  however, this 
does not mean that the commission does 
n o t   ve r i f y   t h e   i m p l e m e nt at i o n   o f   t h e   re l-
e v a n t   E U   l e g i s l a t i o n ;   o n   t h e   b a s i s   o f   t h e 
p rov i s i o n s   o f   t h e   re l e va nt   e nv i ro n m e nt a l 
d i r e c t i ve s,   t h e   co m m i s s i o n   a s s e s s e s   t h e 
d a t a   r e p o r t e d   a n d ,   i f   r e q u i r e d ,   i t   t a k e s 
a c t i o n   to   e n s u re   co m p l i a n ce   w i t h   t h e   E U 
environ mental  standards  l aid  d own .

35 . (a)
pro ce d u re s   fo r   a p p rov i n g   p ro j e c t s   u n d e r 
t h e   co h e s i o n   p o l i c y   fo r   t h e   2 0 0 7 – 1 3   p ro -
gramming per iod have been significantly 
reinforced.

c o m p a r e d   t o   p r e v i o u s   p r o g r a m m i n g 
 per iods, the cohesion fund is better inte -
g r a t e d   i n t o   p r o g r a m m i n g ,   e n a b l i n g   a 
m o re   s t r a te gi c   a p p ro a c h   to   t h e   d e ve l o p -
m e n t   o f   c o - f i n a n c e d   p r o j e c t s ,   i n c l u d i n g 
m a j o r   p ro j e c t s   ( i . e.   p ro j e c t s   w i t h   i nve s t -
ment costs of over 50 million euro (cohe -
sion fund regulation (Ec ) no 1084/2006)). 
the legal definition of major projec ts and 
t h e   i n f o r m a t i o n   t o   b e   s u b m i t t e d   b y   t h e 
M e m b e r   s t a t e s   t o   t h e   c o m m i s s i o n   w a s 
strengthened (ar ticles 39 and 40 of r egu-
lation (Ec ) no 1083/2006).

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4 6.
t h e   c o m m i s s i o n   c a r r i e s   o u t   t h e   f i n a l 
e va l u at i o n   b a s e d   o n   t h e   co n f i r m at i o n   by 
t h e   M e m b e r   s t a te   a u t h o r i t i e s   i n   t h e   c l o -
sure documents that the projec t is opera-
t i o n a l   a n d   i n   c o n fo r m i t y   w i t h   t h e   i n i t i a l 
decision. national author ities are obliged 
t o   c e r t i f y   t h e re i n   t h a t   p ro j e c t s   a re   c o m-
pleted and operational. Each co -financed 
p r o j e c t   s h o u l d   m e e t   t h e   o b j e c t i v e s   l a i d 
down  in t he request  for co -fin an c in g  and 
i n   t h e   c o - f i n a n c i n g   d e c i s i o n .   w h e r e   t h e 
closure documents are submitted accord-
i n g   t o   a p p l i c a b l e   r u l e s   a n d   t h e   M e m b e r 
state cer tifies the operabilit y of projec ts, 
t h e   c o m m i s s i o n   h a s   t h e   l e g i t i m a c y   t o 
make th e fin al payments.

t h e   p ro p e r   s u b s e q u e n t   o p e r a t i o n   o f   t h e 
c o - f u n d e d   p r o j e c t s   i s   n o t   i n   t h e   s c o p e 
o f   t h e   e va l u at i o n   o f   co h e s i o n   p o l i c y,   b u t 
falls un der  t he ge neral E U legislat ion .

4 7.
I n   o n e   o f   t h e   c a s e s,   t h e   co m m i s s i o n   h a s 
not yet closed the projec t. I t will ver ify at 
c l o s u re   t h e   i m p l e m e n t a t i o n   o f   m e a s u re s 
requested to reduce cont amin at i on .

5 0.
t h e   co m m i s s i o n   w e l c o m e s   t h e   o b s e r v a-
t i o n   t h a t   i t   a p p l i e d   a p p r o p r i a t e   c o r r e c -
t i o n s   i n   a l l   c a s e s   o f   p u b l i c   p r o c u r e m e n t 
wea k n esse s.

b ox 7. f irst paragra ph
the commission notes the length of time 
n e e d e d   f o r   t h e   f u l l   f u n c t i o n i n g   o f   s u c h 
c o m p l e x   i n f r a s t r u c t u r e   p r o j e c t s .   t h i s   i s 
o n e   o f   t h e   l i m i t a t i o n s   i n   p r o j e c t s   w i t h 
m u l t i p l e   s t a g e s   o r   m a j o r   p r o j e c t s   w h i c h 
cove r   o n l y   p a r t s   o f   a n   i n f ra s t r u c t u re   n e t -
wor k .

I n   t h i s   s p e c i f i c   c a s e ,   a n   i m p o r t a n t   d i s-
t r i b u t i o n   n e t w o r k   t o   c o nv e y   w a t e r   f r o m 
t h e   d e s a l i n a t i o n   p l a n t   h a s   b e e n   p u t   i n 
o p e r a t i o n   i n   ju n e   2 0 1 0 .   a s   a   r e s u l t ,   i t   i s 
expec ted that the degree of utilisation of 
t h e   p l a nt   w i l l   s u b s t a nt i a l l y   i n c re a s e.  th i s 
t re n d   w i l l   c o n t i n u e,   a s   n e w   c o m p l e m e n -
ta r y inf ras truc t ure is p u t in p l ace.

b ox 7. s econd pa ra g ra p h
t h e   c o m m i s s i o n   n o t e s   t h a t   i t   i s   t h e 
n a t i o n a l   a u t h o r i t i e s ’  r e s p o n s i b i l i t y   t o 
e n s u r e   p r o j e c t s’  o p e r a b i l i t y,   f u n c t i o n a l-
i t y   a n d   co m p l i a n ce   w i t h   E U   p o l i c i e s.  th e 
co m m i s s i o n   ve r i f i e s   t h a t   t h e s e   r u l e s   a re 
obser ved at  t he l atest at  c l o su re. 

I n   t h i s   c a s e ,   t h e   gr e e k   a u t h o r i t i e s   c a r -
r i e d   o u t   t h e   n e c e s s a r y   p r o c e d u r e s   f o r 
selec ting a designer for the equipment in 
t h e   w a t e r   t r e a t m e n t   p l a n t .   t h e   c o n t r a c t 
s i g n e d   i n   d e c e m b e r   2 0 0 9   p r o v i d e s   f o r 
c o m p l e t i o n   o f   t h e   d e s i g n   o f   t h e   n e c e s-
sar y  layou t  and   water   p ur ific ation   e quip -
m e n t   w i t h i n   8 0   c a l e n d a r   d a y s .   t h e   c o n-
t r a c t   fo r   a d d i t i o n a l   wo r k s   w i l l   b e   s i g n e d 
subsequently, with the aim of completing 
the  wor k w it hin  20 10 .

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6 0.
t h e   c o m m i s s i o n   r e c o g n i s e s   t h a t   t h e r e 
w e r e   s o m e   w e a k n e s s e s   i n   s e t t i n g   g r a n t 
r a t e s   i n   t h e   p a s t   i n   p a r t   d u e   a l s o   t o   t h e 
re g u l ato r y   f ra m e wo r k .  th e   a p p l i c at i o n   o f 
ar ticle 40 of regulation (Ec ) no  1083/2006 
p ro v i d e s   fo r   a   s y s t e m a t i c   u s e   o f   t h e   c b a 
for major projec ts. while examining major 
p ro j e c t   a p p l i c at i o n s   fo r   t h e   2 0 0 7 – 1 3   p ro -
gramming period, the commission verifies 
w h e t h e r   t h e   c b a  m e t h o d o l o g y   h a s   b e e n 
c o n s i s t e n t l y   f o l l o w e d .   U n l i k e   t h e   p r e v i-
ous  programming  per iod  the  commission 
i s   n o t   a p p ra i s i n g   co h e s i o n   fu n d   p ro j e c t s 
b e l ow   t h e   5 0   m i l l i o n   e u ro   t h re s h o l d.   I t   i s 
the M ember states’ responsibilit y to car r y 
o u t   p r o p e r l y   t h e   c b a  a n d   e s t i m a t e   t h e 
funding gap for each projec t.

fo r   t h e   2 0 0 7 – 1 3   p e r i o d ,   t h e   co m m i s s i o n 
issued t wo guidance notes, work ing docu-
m e n t   no   4 ,  ‘ gu i d a n c e   o n   t h e   m e t h o d o l-
ogy for car r ying out cost-benefit analysis’ 
and ‘guidance note on  ar ticle 55 of coun-
c i l   r e g u l a t i o n   ( Ec )   no   1 0 8 3 / 2 0 0 6 :   r e v -
enue  generating  projec ts’. the  systematic 
u s e   o f   t h e s e   h a s   i m p r o v e d   c o n s i d e r a b l y 
the qualit y of cbas submitted by M ember 
s t a te s.  th e  ‘ f u n d i n g   g a p’  m e t h o d o l o g y   i s 
c l e a r l y   d e f i n e d   i n   a r t i c l e  5 5   o f   r e g u l a-
tion  (Ec )  no  1083/2006,  applicable  to  the 
2 0 0 7 – 1 3   p e r i o d .   I t   d i d   n o t   a p p l y   i n   t h e 
s a m e   w ay   fo r   t h e   p e r i o d   2 0 0 0 – 0 6   fo r   t h e 
Er d f ,   w h e re   fo r   p ro j e c t s   g e n e rat i n g   s u b -
stantial net revenues maximum co -financ-
ing rates were established.

52 .
t h e   c o m m i s s i o n   s u p p o r t s   t h e   c o u r t ’s 
p o s i t i o n   t h a t   c o s t   o v e r r u n s   s h o u l d   b e 
avoide d as mu ch as p o ssib l e. 

ho w e v e r,   i t   n o t e s   t h a t   i n   8 0  %   o f   c a s e s 
the  co st increa s es were l ess  tha n  3 0  %. 

a c a d e m i c   r e s e a r c h   r e p o r t s   t h a t   l a r g e 
i n f r a s t r u c t u re   p ro j e c t s   a re   ve r y   co m p l e x 
u n d e r t a k i n g s   a n d ,   h i s t o r i c a l l y,   e s c a l a-
t i o n s   o f   c o s t s   s i g n i f i c a n t l y   b e y o n d   i n i -
t i a l   b u d g e t s   a re   ve r y   co m m o n .   s u c h   co s t 
o v e r r u n s   m a y   e x c e e d   5 0  %   a n d   r e a c h 
10 0 %  in real  ter ms.

55 .
M e m b e r   s t a te s   a re   i n   c h a rg e   o f   d e f i n i n g 
t h e   c a p a c i t y   o f   t h e   p ro p o s e d   i n f r a s t r u c -
tures, according to the expec ted demand. 
t h e   l i f e - c y c l e   o f   m o s t   o f   t h e s e   i n f r a -
s t r u c t u r e s   b e i n g   m e a s u r e d   i n   t e r m s   o f 
d e c a d e s ,   a n   a s s e s s m e n t   o f   t h e i r   o p e r a t -
i n g   rate   s h o u l d   a cco rd i n g l y   a l s o   b e   s e e n 
under th is  l on ger-ter m p ersp ec ti ve.

57 . (a)
wi t h i n   t h e   a u d i t e d   s a m p l e   a c t u a l l y   o n l y 
o n e   p r o j e c t   o u t   o f   s e v e n ,   o r   1 4  % ,   o p e r -
ates at l ow le vel.

58 . (a)
the commission refers to its reply to par-
agraph  55.

b ox 8. f irst paragra ph
t h e   c o m m i s s i o n   u n d e r l i n e s   t h a t   i t   i s 
M e m b e r   s t a t e s ’  r e s p o n s i b i l i t y   t o   s e l e c t 
a n d   m o n i t o r   E r d f   c o - f i n a n c e d   p r o j e c t s 
i n   t h e   f r a m e w o r k   o f   o p e r a t i o n a l   p r o -
gramme s. the   co mm issio n  ap p rove s  on ly 
m a j o r   p ro j e c t s.   I n   t h i s   c o n t e x t ,   p o s s i b l e 
c o n f l i c t i n g   s t r a t e g i e s   b e t w e e n   r e g i o n a l 
a n d   l o c a l   l e v e l   a d m i n i s t r a t i o n s   f a l l 
b e yo n d   t h e   co m m i s s i o n’s   s c o p e   o f   c o m-
petence.

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6 4.
f o r   p r o j e c t s   s u b j e c t   t o   a   c o m m i s s i o n 
d e c i s i o n ,   r e v e n u e s   w e r e ,   a s   a   g e n e r a l 
r u l e ,   t a k e n   i n t o   c o n s i d e r a t i o n   t o   d e t e r -
m i n e   t h e   f u n d i n g   r a t e.   ho w e v e r,   a   m e r e 
a p p l i c a t i o n   o f   t h e   f u n d i n g   g a p   p r i n c i-
p l e   w o u l d   h a v e   c r e a t e d   a   d i s i n c e n t i v e 
t o   a p p l y   t h e   p o l l u t e r   p a y s   p r i n c i p l e .   to 
a v o i d   t h e s e   n e g a t i v e   e f f e c t s ,   t h e   c o m-
m i s s i o n   p r o p o s e d   t o   a d o p t   a   m o d i f i e d 
financing gap for mula for water projec ts. 
I n   s o m e   c a s e s,   a f fo rd a b i l i t y   a n d   s u s t a i n-
abilit y is sue s were also  cons idere d.

6 6.
t h e   c o m m i s s i o n   n o t e s   t h a t   i n   t h e   f i n a l 
r e p o r t s   r e q u e s t e d   f o r   c o h e s i o n   f u n d 
projec ts, national authorities are required 
t o   c o n f i r m   t h e   v e r i f i c a t i o n   o f   f i n a n c i a l 
i n fo r m at i o n   re l at i ve   to   t h e   p ro j e c t.   I f   n e t 
r e v e n u e s   e x c e e d   1 0  %   o f   t h e   a m o u n t s 
foreseen , rates are to be adj uste d.

6 7.
the commission refers to its reply to para-
graph  6 6.

6 7. (a)
fo r   t h e   2 0 0 7 – 1 3   p e r i o d ,   wo r k i n g   d o c u-
ment no 4 makes clear that charging pol-
i c y   s h o u l d   t a k e   i nto   a cco u nt   t h e   p ro j e c t s 
n o r m a l   p r o f i t a b i l i t y   a n d   t h e   n e e d   t o 
c o v e r   o p e r a t i o n a l   c o s t s   w h i l e   e n s u r i n g 
a f fo rd a b i l i t y   ( i . e.   t h e   i m p a c t   o f   t a r i f fs   o n 
user s’ in come ).

6 8–6 9 .
s ee reply  to para graph  9.

61 .
f o r   t h e   E r d f,   t h e   r a t e s   o f   a s s i s t a n c e 
h a d   t o   b e   s e t   a c c o r d i n g   t o   a r t i c l e   2 9 ( 4 ) 
o f   r e g u l a t i o n   ( Ec )   no   1 2 6 0 / 1 9 9 9 .   t h e s e 
r u l e s   a l l owe d   fo r   f l ex i b i l i t y   i n   s e t t i n g   co -
financing rates. I n the  cohesion fund the 
f l e x i b i l i t y   a l l owe d   by   t h e   re g u l a t i o n   w a s 
even greater than for the Erdf. the com-
m i s s i o n’s   g u i d a n c e   o n   r e v e n u e   g e n e r a t -
ing projec ts str ived for maximum consist-
e n c y   i n   t h e   m e t h o d s   a p p l i e d ,   e s p e c i a l l y 
wit hin a given  M emb er s t ate.

62 .
a s   Er d f  p r o j e c t s   a r e   n o t   s u b j e c t   t o 
a p p r o v a l   b y   t h e   c o m m i s s i o n ,   t h e   d e c i -
sions on the co -financing rate were taken 
by nat ional  com p etent aut ho r iti e s.

63 .
fo r   t h e   2 0 0 7 – 1 3   p e r i o d ,   wo r k i n g   d o c u-
m e n t   n o   4 ,   c o n t a i n i n g   g u i d a n c e   fo r   c a r -
r y i n g   o u t   c b a,   p rov i d e s   a   s e t   o f   wo r k i n g 
rules and indicative values for key param-
e t e r s   fo r   c b a  ( e. g.   d i s c o u n t   r a t e s ,   r e fe r -
ence  p er iods ).   I n   the  d oc um ent   th e   com-
m i s s i o n   r e c o m m e n d s   t h a t   t h e   M e m b e r 
st ate s   d e ve l o p   t h e i r   ow n   c b a  g u i d e l i n e s 
to take into account their specific institu-
tional and eco nom ic  conditio ns.

63 . (a)
si n ce   2 0 0 3   t h e   co m m i s s i o n   p ays   p a r t i c u-
l a r   a t t e n t i o n   t o   t h e   q u a l i t y   o f   c b a s   a n d 
t h e r e f o r e   t h i s   i s s u e   o f   i n c l u d i n g   d e p r e -
ciation  no  lo nger  occ u rs.

63 . (b)
the appraisal of cohesion fund and major 
projec ts is carried out at the level of each 
i n d i v i d u a l   p r o j e c t   t o   a s s e s s   i t s   f i n a n c i a l 
an d econo mic pro fitab il it y.

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conclusIons and   
rEcommEndatIons

recommendation 1

71 .
t h e   c o m m i s s i o n   w e l c o m e s   t h e   c o u r t ’s 
c o n c l u s i o n   t h a t   s t r u c t u r a l   m e a s u r e s ’ 
s p e n d i n g   h a s   c o n t r i b u t e d   t o   i m p r o v i n g 
supply o f water fo r do mes t ic  u se.

72 . (a)
t h e r e   h a s   b e e n   a   g r o w i n g   a w a r e n e s s   o f 
d ow nw a rd   t re n d s   i n   w a te r   co n s u m p t i o n . 
no n e t h e l e s s,   t h i s   w a s   n o t   e v i d e n t   i n   t h e 
p ro j e c t s   re v i e we d   by   t h e   co u r t ,   a s   t h e s e 
t r e n d s   w e r e   n o t   w e l l   r e c o g n i s e d   i n   t h e 
1 9 9 0 s   o r   e a r l y   2 0 0 0 s ,   w h e n   t h e   a u d i t e d 
p r o j e c t s   w e r e   p r e p a r e d   a n d   i m p l e -
mented.

72 . (b)
t h e   c o m m i s s i o n   a g r e e s   t h a t   t h e r e   i s 
s c o p e   fo r   i m p rove m e n t ,   t h o u g h   i t   i s   d i f-
f i c u l t   t o   a c h i e v e   i n   e a c h   c a s e   a   p e r f e c t 
m atc h   b e t we e n   e x - a n te   d e m a n d   a n d   s av-
ings fore cast s agains t the real  o utcom e.

72 . (c)
t h e   l e g i s l a t i v e   f r a m e w o r k   a p p l i c a b l e   a t 
t h e   t i m e   o f   t h e   d e s i g n   a n d   s u b m i s s i o n 
for  approval   o f  t he  au dited  p ro je c t s  st ip -
u l a t e d   c l e a r l y   t h e   re s p o n s i b i l i t i e s   o f   t h e 
co m m i s s i o n   w i t h   re g a rd   to   t h e   a p p rov a l 
o f   c o h e s i o n   f u n d   p r o j e c t s   a n d   m a j o r 
projec t s.

t h e   c o m m i s s i o n   c o n s i d e r s   t h a t   m a n a g-
i n g   a u t h o r i t i e s   h a v e   a n   i m p o r t a n t   r o l e 
i n   e n s u r i n g   t h a t   s e l e c t e d   p r o j e c t s   m e e t 
these p er fo r mance s tandards.

I n   t h i s   r e s p e c t   t o   s t r e n g t h e n   c a p a c i t y 
i n   t h e   n e w   M e m b e r   s t a t e s   t h e   ja s p e r s 
f a c i l i t y   w a s   s e t   u p   fo r   t h e   p r o g r a m m i n g 
per iod 2 00 7– 13.

(a)  (i)
t h e   c o m m i s s i o n   a g r e e s   t h a t   t h e   i d e n t i-
f i e d   i s s u e s   i n   t h e   r e c o m m e n d a t i o n s   a r e 
i m p o r t a n t   e l e m e n t s   t o   e n s u r e   i m p r o v e d 
sust ainabilit y  of the  region s con ce r ne d.

t h e   co m m i s s i o n   c o n s i d e r s   t h a t   t h e   p ro -
g r e s s i v e   i m p l e m e n t a t i o n   o f   t h e   w a t e r 
f r a m e w o r k   d i r e c t i v e   w i l l   s i g n i f i c a n t l y 
c o n t r i b u t e   t o w a r d s   a d d r e s s i n g   t h e s e 
issues.

(a)  (ii)
t h e   c o m m i s s i o n   a g r e e s   o n   t h e   i m p o r t -
a n c e   o f   i d e n t i f y i n g   a l l   p o s s i b l e   a l t e r n a-
t i v e   s o l u t i o n s   a n d   s u p p o r t s   t h i s   r e c o m-
men dat ion .

I t   h a s   a l re a d y   a c k n ow l e d g e d   t h e   i m p o r t -
ance of those issues in its communication 
o n   wate r   s c a rc i t y   a n d   d ro u g ht s,   a d o p te d 
in  20 07 .

(b)  (i)
I n   i t s   c o m m u n i c a t i o n   o n   w a t e r   s c a r c i t y 
and droughts, adopted in 2007, the com-
m i s s i o n   h a s   s t r e s s e d   t h e   i m p o r t a n c e   o f 
identifying and implementing prevention 
m e a s u r e s   ( e. g.   w a t e r   s a v i n g,   a l t e r n a t i v e 
solutions, water  pr ic ing  polic y ) .

t h e   c o m m i s s i o n   c o n s i d e r s   t h a t   s t r i c t e r 
re q u i re m e nt s   fo r   a p p l i c at i o n s,   t h e   wo r k-
i n g   d o c u m e n t   o n   c o s t - b e n e f i t   a n a l y -
s i s   a n d   a n   u p d a t e d   c b a  g u i d e   s h o u l d 
i m p r o v e   t h e   q u a l i t y   o f   c b a s   a n d   p r o -
v i d e   a   c o m m o n   f r a m e w o r k   f o r   p r o j e c t 
appraisal.

I m p rov i n g   wate r   s u p p l y   e f f i c i e n c y   i s   c r u-
c i a l ;   o t h e r   c r i te r i a   a l s o   n e e d   to   b e   t a k e n 
into account as appropr iate.

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(b)
fo r   t h e   p r o g r a m m e   p e r i o d   2 0 0 7 – 1 3   a n d 
i n   t h e   f r a m e w o r k   o f   t h e   s i m p l i f i c a t i o n 
exercise  unde r tak en   in  2 008 –10 ,   t h e  pro -
v i s i o n s   fo r   re p o r t i n g   o n   Er d f  a n d   m a j o r 
p r o j e c t s   h a v e   b e e n   s i g n i f i c a n t l y   s i m p l i-
f i e d   a n d   s t re a m l i n e d   to   a l l ow   fo r   a n   e a s-
ier  and  more  e ffic ient mon itor in g.

7 5. (a)
th e   co m m i s s i o n   a g re e s   w i t h   t h e   o b j e c t-
i v e   o f   m i n i m i s i n g   a s   m u c h   a s   p o s s i b l e 
d e l a y s   i n   t h e   i m p l e m e n t a t i o n   o f   c o -
f i n a n c e d   p r o j e c t s.   no n e t h e l e s s,   i t   n o t e s 
t h at   t h e   co m p l ex i t y   o f   s u c h   p ro j e c t s   m ay 
sometimes be an inherent fac tor contr ib -
utin g to de lays.

7 5. (c )
w h i l e   t h e r e   w e r e   l i m i t e d   w e a k n e s s e s   i n 
s e t t i n g   g r a n t   r a t e s   i n   t h e   p a s t ,   re s u l t i n g 
f r o m   d e f i c i e n c i e s   i n   t h e   c b a s ,   t h e   l e g a l 
f r a m e wo r k   a n d   t h e   co m m i s s i o n’s   g u i d e -
l i n e s   h a v e   b e e n   s t r e n g t h e n e d   f o r   t h e 
2 00 7–1 3  pe r io d.

the application of the cost recover y pr in-
c i p l e ,   s e t   o u t   i n   di r e c t i v e   2 0 0 0 / 6 0 / Ec   
applicable from the end of 2010, will fur-
ther facilitate the setting of grants in the 
future.

(b) (ii )
t h e   p r o g r e s s i v e   i m p l e m e n t a t i o n   o f   t h e 
wate r   f ra m e wo r k   d i re c t i ve   w h i c h   h a r m o -
n i s e s   t h e   r u l e s   o n   w a t e r   m a n a g e m e n t   i n 
t h e   E U   w i l l   a l l o w   m o r e   e f f i c i e n t   w a t e r 
resource mana g ement.

73 .
t h e   c o m m i s s i o n   w e l c o m e s   t h e   c o u r t ’s 
conclusion and agrees with the objec tive 
o f   r e d u c i n g   d e l a y s   i n   t h e   i m p l e m e n t a-
t i o n   o f   c o - f i n a n c e d   p r o j e c t s .   no n e t h e -
l e s s,   i t   n o te s   t h at   t h e   co m p l ex i t y   o f   s u c h 
p r o j e c t s   m a y   s o m e t i m e s   b e   a n   i n h e r e n t 
fac tor co ntr ib u ting  to del ays.

74 .
t h e   c o m m i s s i o n   r e c o g n i s e s   t h a t   t h e r e 
w e r e   d e f i c i e n c i e s   i n   m o n i t o r i n g   d a t a . 
howe ve r,   t h e   co m m i s s i o n   co n s i d e r s   t h at 
current monitoring tools (final repor ts for 
c o h e s i o n   fu n d   p r o j e c t s   a n d   a n n u a l   a n d 
final re p or ts fo r  Er df majo r p roj ec ts )  are 
helpful  to  info r m  on  the ac h ieve me nt s of 
projec t s. 

t h e   c o m m i s s i o n   v e r i f i e s   t h e   r e s p e c t   o f 
conditio ns at  t he t ime o f final  p ay me nt.

recommendation 2

(a)
t h e   c o m m i s s i o n   a g r e e s   t h a t   p e r i o d s   i n 
w h i c h   p ro j e c t s   re m a i n   i d l e   d u e   to   l a c k   o f 
co m p l e m e nt a r y   i n f ra s t r u c t u re   s h o u l d   b e 
r e d u c e d ,   e v e n   t h o u g h   i t   n o t e s   t h a t   t h e 
c o m p l e x i t y   o f   s u c h   p r o j e c t s   m a y   s o m e -
t i m e s   b e   a n   i n h e re nt   f a c to r   co nt r i b u t i n g 
to delays.

I n   o r d e r   t o   s t r e n g t h e n   c a p a c i t y   o f   t h e 
n e w   M e m b e r   s t a t e s   t o   p r e p a r e   m a t u r e 
p r o j e c t s ,   t h e   ja s p e r s   f a c i l i t y   w a s   s e t   u p 
for th e p ro gramming  per iod 2 00 7 – 1 3 . 

t h e   c o m m i s s i o n   a l s o   a g r e e s   t h a t   b e t t e r 
m o n i t o r i n g   o f   a c h i e v e m e n t s   c a n   h e l p 
M e m b e r   st ate s   i m p rove   p ro j e c t   m a n a g e -
ment.

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(b)  (i)
t h e   ja s p e r s   f a c i l i t y   p r o v i d e s   t e c h n i c a l 
a s s i s t a n c e   t o   t h e   n e w   M e m b e r   s t a t e s 
when they are prepar ing to submit major 
p r o j e c t s   t o   t h e   c o m m i s s i o n .   t h e   c o m -
m i s s i o n   a l s o   h a s   a   co n t r a c t   w i t h   o u t s i d e 
s e c t o r a l   e x p e r t s   w h o   c a n   b e   c o n s u l t e d 
o n   te c h n i c a l   a n d   s o c i o e co n o m i c   a s p e c t s 
o f   p ro j e c t   a p p l i c a t i o n s.   I t   co n s i d e r s   t h a t 
these steps will significantly improve the 
q u a l i t y   o f   a p p l i c a t i o n s   p r i o r   t o   s u b m i s-
sion  to th e c ommiss ion.

(b)  (ii)
t h e   c o s t   re c o ve r y   p r i n c i p l e   w i l l   b e c o m e 
a p p l i c a b l e   b y   t h e   e n d   o f   2 0 1 0 ,   a c c o r d-
i n g   t o   a r t i c l e   9   o f   t h e   w a t e r   f r a m e w o r k 
direc t ive. th e  commiss ion   consider s  t hat 
t h i s   w i l l   i n c re a s e   t h e   e f f i c i e n t   u s e   o f   E U 
f u n d s.   I t   w i l l   s c r u t i n i s e   t h e   i m p l e m e n t a-
tion  by  M ember  s tates  of  t his pr in ciple.

recommendation 3

(a) (i)
the commission suppor ts this recommen-
dat ion .

t h e   c o m m i s s i o n   c o n s i d e r s   t h a t   m a n a g-
i n g   a u t h o r i t i e s   h a v e   a n   i m p o r t a n t   r o l e 
i n   e n s u r i n g   t h a t   s e l e c t e d   p r o j e c t s   m e e t 
these p er fo r mance s tandards.

I n   t h i s   r e s p e c t ,   t o   s t r e n g t h e n   c a p a c i t y 
i n   t h e   n e w   M e m b e r   s t a t e s   t h e   ja s p e r s 
f a c i l i t y   w a s   s e t   u p   fo r   t h e   p r o g r a m m i n g 
per iod 2 00 7– 13.

I n   a d d i t i o n ,   t h e   c o r r e c t   i m p l e m e n t a t i o n 
of the direc tive on environmental assess-
ment of plans and programmes ( direc tive 
20 01/4 2/Ec ) is  rel evant  in  this  regard.

(a) (ii )
t h e   c o m m i s s i o n   s u p p o r t s   t h i s   r e c o m-
mendat io n  an d  refer s  to   it s  rep l y   to  (a )( i)  
above.

t h e   c o r r e c t   i m p l e m e n t a t i o n   o f   t h e 
d i r e c t i v e   o n   e n v i r o n m e n t a l   a s s e s s m e n t 
o f   p r o j e c t s   (di r e c t i v e   8 5 / 3 3 7 / E Ec,   a s 
amend ed) is re le vant  in  this reg ard.

(a) (iii )
the commission refers to its reply to (a)(i)  
above.

(b)
t h e   c o m m i s s i o n   i n t e n d s   t o   e n s u r e   t h a t 
the reinforced provisions for the 2007–13 
p e r i o d   a r e   f u l l y   i m p l e m e n t e d   a n d   b r i n g 
the  des ire d resul t s.

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

special r eport no 9/2010 – Is EU structural measures spending on the supply of water for domestic consumption used to best effect?

European court of auditors

special report no 9/2010 

Is Eu structural measures spending on the supply of water for domestic consumption used to best effect?

luxembourg: publications office of the European Union

2010 — 59 pp. — 21 × 29.7 cm

Isbn 978-92-9207-845-4  

doi:10.2865/16131

how to obtain Eu publications

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t h E  co U r t ’s  aU d I t  f o c U s E d  o n  d o M E s t I c  wat E r  s U p p ly 

InfrastrUc tUrEs  co-fInancEd  UndEr  thE  EU  strUc tUral 

MEasUrEs  dUrIng thE  2000–06  prograMME  pErIod  In  spaIn, 

g rE E cE,  po r t U ga l  an d  Ita ly,  t hE  MaI n  rE c Ip I En ts  o f  EU 

fUndIng In thIs arEa.

thEsE InfrastrUc tUrEs aIM at IncrEasIng thE avaIlabIlIt y 

of watEr, IMprovIng thE qUalIt y of thE watEr dIstrIbUtEd 

and thE EffIcIEncy of thE sUpply systEMs.

thE objEctIvE of thE aUdIt was to assEss whEthEr thE Most 

approprIatE  solUtIons  wErE  adoptEd,  thE  co-fInancEd 

projEcts wErE sUccEssfUl and thE objEctIvEs wErE achIEvEd 

at thE lowEst cost to thE EU bUdgEt.

EUropEan coUrt of aUdItors